The spectacle of Bitcoin fans celebrating the prospective granting of legal tender status to it by El Salvador's authoritarian President (he only just extended his executive authority over the country's central bank) must have F.A. Hayek rolling in his grave! 1/2
And despite what many may think, a currency's "legal tender status" has little bearing on its use in ordinary exchange. It is in fact neither necessary nor sufficient.* It mainly has to do with enforcement of debt contracts.
*For example, in Scotland there is no such thing as legal tender. Yet both Scottish banknotes and (less frequently) Bank of England notes are routinely accepted in payments there. On the other hand, although U.S. Notes ("greenbacks") were made legal tender during the Civil War,
They were only accepted at a discount on the west coast, where gold remained the preferred medium of account and exchange.
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