Bank notes are legal tender. Legal tender is a form of payment that is recognized by a legal system to be valid for meeting financial obligations. In other words, it is a currency or form of money that must be accepted as payment for a debt or financial obligation. Bank notes are issued by central banks and are widely accepted as a means of payment for goods and services. Other forms of payment, such as cheques, drafts, and bills of exchange, may also be used in financial transactions, but they are not necessarily legal tender.