Modern currency accepted as the medium of exchange without any use of its own due to reason as mentioned below:

(i) In India, the Reserve Bank of India issues currency notes on behalf of the central government.

(ii) As per Indian law, no other individual or organisation is allowed to issue currency.

(iii) The law legalises the use of rupee as  a medium of payment that cannot be refused in settling transaction in India.

(iv) No individual in India can legally refuse a payment made in rupee. Hence the rupee is widely accepted as the medium of exchange.