Demonetisation is the act of removing the status of a legal tender from a unit of currency currently in circulation in the economy. It is a move used by governments to remove units of the existing currency in an economy.
Demonetisation can have serious consequences on the economy both on macroeconomics and microeconomics front. A sudden removal of currency can hamper economic activity. Therefore, there needs to be constant regulation in case such a move is implemented by the government and the central bank.
