House Increases Legal Tender Limit for Coins

The legal limit for the number of coins which can be tendered in a transaction is to be increased to 50 pieces.
This followed the passage of the Bill, ‘An Act to Amend the Bank of Jamaica Act’, in the House of Representatives, Wednesday (September 16), which seeks to amend Section 15 of the BOJ Act to affect these changes.
Minister of Finance and the Public Service, Hon. Audley Shaw, who tabled the Bill, explained that the replacement of currency notes by coins, has given rise to the need for adjusting the legal tender provisions to increase the maximum number of coins which can be used in transactions.
“The existing limits have become outdated and, to an increasing extent, pose a hindrance to coins being used or accepted by the public for the settlement of small obligations,” he noted.
The Minister said that the concept of legal tender, allows the law to place a restriction on the number of notes and coins that may be legally tendered in the settlement of a payment obligation by a payer.
He explained that under the current provisions in section 15 of the BOJ Act, currency notes are legal tender for the payment of any amount, but coins are legal tender only up to a limit set in the law. The last revision of these provisions was in 1973.
“At that time, the highest denomination coin was the 25 cents. In the years following that revision, coin denominations have been introduced to replace the $1, $5, $10 and $20 denominations of currency notes,” he said.
Mr. Shaw also pointed out that, in the case of the $10 and $20 coins, the two highest n denominations currently circulating, the existing legal provisions prescribe a legal tender limit of merely $20, with the result that just two $10 coins or one $20 coin, respectively, may be accepted as legal tender.
The new legal tender limits for the coins which are currently in circulation will be as follows: for one cent, the legal tender limit 50 cents; 10 cents, $5; 25 cents, $12.50; $1 coin, $50; $5 coin, $250; $10 coin, $500; and $20 coin, legal tender is $1000.
“This will affect the desired adjustment and provide flexibility for the introduction of coins of a higher value in the future,” Mr. Shaw said.
The amendment also ensures that the overall number of coins that can constitute legal tender, in any one transaction, is limited to 50 pieces only. This will cover cases where coins of different denominations are tendered.