Gresham’s Law states that a legally overvalued currency will force a legally undervalued currency out of circulation.
Gresham’s law originated as an observation of the effects of the depreciation of metallic money, but it is also applicable in the modern world of paper and electronic money.
In the absence of effectively enforced legal tender laws, such as in hyperinflationary crises or international commodity and currency markets, Gresham’s law operates in reverse.