Amid rising inflation concerns, more states are moving towards gold-backed financial systems, promoting the use of gold debit cards. States with a history of mining, like Texas and Florida, are leading the charge by passing laws that permit gold transactions for savings and expenses. Critics argue these laws may disrupt markets and create tax shelters for the wealthy. However, advocates believe it provides a hedge against inflation, as gold value typically rises over time.
Georgia state Sen. Marty Harbin, a Republican, introduced bipartisan legislation to adopt gold and silver as legal tender, aiming to create an electronic payment system. Although the state Senate passed it, the bill stalled in the House. Harbin plans to reintroduce similar legislation next session.
Oklahoma is considering a gold-backed payment system, while states like Arizona, Iowa, and Mississippi have explored similar legislation. Utah’s Governor Spencer Cox, despite concerns, allowed a gold measure to pass this year without his signature, stating legislative persistence. “Many are concerned that this will result in unwelcome government involvement in the gold market,” he wrote in a statement.
Supporters of transactional gold laws seek tax exemptions for gold and silver, citing their historical role as currency. Matthew Gardner from the Institute on Taxation and Economic Policy disagrees, stating there’s no economic benefit from holding gold as with other investments. He suggests direct action against inflation rather than relying on gold.
Georgia Democratic state Sen. Sonya Halpern sees potential in transactional gold systems, noting technology allows consumers to own and spend small gold shares. She co-sponsored Harbin’s bill, viewing gold as a complement to traditional savings methods. Halpern cited Glint, a company facilitating gold transactions with prepaid debit cards, as an example. Glint COO Jason Ollivier stated legislation aids in scaling their technology and making gold more accessible.
States boosting gold
Utah’s new law mandates a gold-backed payment system for state vendors, aiming to legitimize and expand the gold market. State Treasurer Marlo Oaks believes state involvement could challenge federal tax policy, suggesting a reevaluation of gold’s tax treatment. A 2024 Utah workgroup explored gold’s role in fiscal stability amid federal debt concerns. Utah currently holds $178 million in gold reserves.
Other states like Texas and Wyoming are also securing gold. The Texas Bullion Depository, established in 2015, is the first state-run precious metals facility, and Wyoming stores state-owned gold worth millions. Chris Colson from the Federal Reserve Bank of Atlanta noted the nascent stage of this gold rush, comparing it to the growth of cryptocurrency like Stablecoin. He anticipates market dynamics will shape the future of gold-backed systems.
