I agree this is probably what would happen, however it 'should' not be possible. In UK law it is illegal to pay a debt with a debt; seeing as notes are essentially IOU's from the bank 'promising' to pay, you should be breaking the law any time you exchange them for goods or services. By making the notes themselves legal tender, independant of any sterling silver to back them up, the government circumvents this illegality and puts us all in hock to the banks. Essentially they made an illegal practice legal, but only for themselves, you or I would be criminals for doing the same thing.