Why Are “Old Rubles” Not Accepted in Russia, but Old Dollars Are Valid in The US?
No other banknotes can be used for payments
There is a question that often arises when it comes to monetary reforms that involve introducing a new type of banknote into circulation.
Is it possible to pay in dollars from any year in the US?
The history of money in the United States dates back to 1776 when the thirteen British colonies declared independence.
The first banknotes were not similar to modern dollars (and, in general, were not dollars, for example, the state of Virginia issued pounds), but it is hard to imagine that if such a banknote appeared in a store now, it would be quietly accepted for payment.
The first US money was issued in 1775, but to me, they looked like modern dollars. 📷
The first dollars, apparently similar to modern ones, were issued almost 100 years later, so maybe you can use them freely?
In reality, neither one nor the other banknotes can be used for payments, plus they won’t be accepted by you or the banks;
According to US law, only banknotes issued after 1914 are considered valid. It was then that the US Federal Reserve System was formed, a system of central banks that regulates the circulation of money in the US.
Dollars issued after 1914 can be used to pay in stores.
True, I don’t think anyone will do that. Old banknotes have collector’s value. A person who finds a banknote issued in the first half of the last century in his grandfather’s coat pocket will probably try to sell it to collectors rather than spend it in the nearest supermarket.
How Russia regulates the deadlines for accepting out-of-circulation banknotes
If we draw analogies with the US Federal Reserve, we can remember that the Bank of Russia is much younger — it was founded on April 13, 1990. Therefore, it is quite logical that it should not accept banknotes from the state banks of the USSR or the Russian Empire.
As for the terms of “validity” of banknotes issued by the Bank of Russia, Article 31 of the Law “On the Central Bank” states the following:
“Bank of Russia banknotes and coins may not be declared invalid (have lost the force of legal tender) unless a sufficiently long period has been established for their exchange for banknotes and coins of a new type. No restrictions on values or exchange issues are allowed. When exchanging Bank of Russia banknotes and coins for banknotes of a new type, the period for withdrawing banknotes and coins from circulation may not be less than one year, but may not exceed five years.”
Moreover, this article, under the same number, is also included in the current law №86-FZ of June 10, 2002, and its previous version — №394–1 of December 2, 1990. In other words, the principle “we accept all Russian banknotes since 1990” (not to mention Soviet ones) does not apply.
However, here it should be noted that there is an indication of specific deadlines in the law — this is certainly a good thing. As long as these terms are specified in the law, any exchange of banknotes in our country will take place gradually, as happened, for example, in 1998 during the denomination.
Or as is happening now. If you remember, in 2022 new 100-ruble notes were introduced into circulation. The old notes will gradually be withdrawn from circulation and replaced with new ones, and this will happen without haste, as it did during the Soviet era.
The Law of the USSR “On the State Bank of the USSR” did not provide for such restrictions, it only said (article 12, paragraph 3) that it was the State Bank of the USSR that determined “the denomination (denomination) of banknotes and; coins and their distinctive features.”
The USSR State Bank could redefine these characteristics at any time. How this happened is well remembered by those who witnessed the “Pavlovsk reform” of 1991, when 3 days were allotted for the exchange of banknotes in denominations of 100 and 50 rubles, or the reform of 1961, when all banknotes were exchanged in 3 months.
The collection value of the banknotes is 100,000 rubles, which have already been exchanged for 100-ruble notes. Screenshot: monetnik.ru
The presence in modern legislation of a maximum period (up to 5 years) for replacing banknotes does not seem to me to be a serious limitation.
One year, let alone five, is enough time to gradually and quietly replace all the banknotes in circulation.
And if later, after many years, someone finds banknotes in their stocks that have gone out of circulation, they won’t be offended. These notes will become collectible and may even increase in value.
