MAS: New Legal Tender Limit for Coins

REACH contributor, Faith S Leong had some concerns on the Monetary Authority of Singapore’s (MAS) new legal tender limit for coins. Appended is MAS’ response to Ms Leong.

MAS will take your feedback into consideration for the Public Consultation exercise on the proposed new legal tender limit.

For your information, there are currently legal tender limits placed on the amount of each coin denomination that can be used for payment.  The existing limits are $2 per denomination for 5-cent, 10-cent and 20-cent coins, and $10 for 50-cent coins. These limits help minimise the payee’s inconvenience and cost in handling large quantities of low denomination currency. Similar to the current legal tender limits, the proposed limits are on a per transaction basis.

As the payment for goods and services is matter of contract or private agreement between a buyer and a seller, both the buyer and seller can specify and agree on how the payment is to be made before entering into a transaction. The legal tender limit does not prevent the seller and buyer from transacting using quantities above the legal tender limit, should both parties agree on how the transaction is to be done. If the poor lady cited by Ms Faith Leong has not encountered any payment issues using her coins currently, it could be due to this reason. 

However, if a payee, i.e. seller, does not wish to accept certain denominations of currency notes or coins as payment or wishes to limit the quantity of coins used in a transaction, he must provide a written notice of this to his payer in accordance to the Currency Act.  Otherwise, all denominations of the coins (up to the legal tender limits) or currency notes tendered by the payer as payment must be accepted.   

Ling (REACH Administrator)

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