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Its illegal to use a substitute for USD dollars. A substitute for USD is exchanged directly for USD as you describe in the footnote. See the Liberty Dollar (http://en.wikipedia.org/wiki/Liberty_Dollar) for an example. Bitcoins, like cigars or real estate, fluctuate in value relative to USD.

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Liberty Dollar was charged with violating laws related to "coins of gold or silver or other metal" -- it's quoted right there in the page you linked to -- as well as being so similar to actual US currency as to be confusing to people. Not for being a currency that competes with the dollar.

So Disney Dollars are illegal?

If they are traded outside Disney. Yes. Other than that, that's not currency. That's just a paper stating that you already paid for something.

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