An understanding of the true nature of money is essential for those seeking economic reforms toward the creation of sustainable societies. People today have more erroneous ideas about money than Victorians had about sex, so please read the following with care.
Let's begin with the distinction between "legal tender" money which only the government or its agency, the Bank of Canada in the case of Canada, can create, and the "money" created by private banks-and increasingly by "near banks". If you happen to have a Bank of Canada note, on it you will read the words "This note is legal tender."
These notes, and checks drawn on the Bank of Canada, are the only legal money in Canada. What that means is that if you owe someone $20 and you give him a $20 bill he is paid and if he refuses payment in this form you are absolved of the debt.
Read More: http://newsdoors.blogspot.com/2013/02/understanding-money.html