[wahern]

Once upon a time bills (banknotes) were bearer instruments which could be exchanged with the Treasury for silver. (Or with whatever issuing entity in whatever they promised--typically gold or silver.) A bearer instrument is payable by the drawee to whomever physically presents the instrument.

These days the value of bills is solely in being legal tender; that is, an authentic bill can be used for satisfaction of any court-ordered debt. That's not the same thing as requiring people to transact with you using those bills. But if someone sued you in court and gained a judgement against you, then you could use those bills to satisfy the judgement. Example: you ran away with a candy bar after the clerk refused to take your dirty dollar bill. They sue you. The court orders you to pay the store $1, which you can satisfy with an authentic $1 note, even the original dirty note.

Maybe the clerk refused the bill because the store only accepts Bitcoin payments. I'm not sure, but the judgment could in theory include whatever costs the store incurred (if any) by being forced to take cash, which you would could also pay in cash. Because ultimately whatever damages or costs were incurred can be satisfied by the jurisdiction's legal currency, in which such damages and costs are also typically denominated.