Gold, Silver to be Legal Currency in Utah
This month, lawmakers in Utah have made plans for gold and silver to be functional as currency in the Beehive State. Utah is now the nation’s first state where precious metals will be as good as US dollars.
Some details for how the new legislation will practically impact trade remain murky. For example, merchants are not required to accept metals as payment, nor is there a clear indication as to whether coins should be adopted at face or market value. However, the state law has clearly exempted sales of precious metal coins from state taxes on capital gains.
From the Associated Press:
“The idea was spawned by Republican state Rep. Brad Galvez, who sponsored the bill largely to serve as a protest against Federal Reserve monetary policy. Galvez says Americans are losing faith in the dollar. If you’re mad about government debt, ditch the cash. Spend your gold and silver, he says.
“His idea isn’t to return to the gold standard, when the dollar was backed by gold instead of government goodwill. Instead, he just wanted to create options for consumers. ‘We’re too far down the road to go back to the gold standard,’ Galvez said. ‘This will move us toward an alternative currency.’
“Earlier this month, Minnesota took a step closer to joining Utah in making gold and silver legal tender. A Republican lawmaker there introduced a bill that sets up a special committee to explore the option. North Carolina, Idaho and at least nine other states also have similar bills drafted.”
The law has also quickly laid the foundation for launching new business ideas, as the move is a boon to innovation in domestic currency alternatives:
“Craig Franco hopes to cash in on it with his Utah Gold and Silver Depository, and he thinks others will soon follow. The idea is simple: Store your gold and silver coins in a vault, and Franco issues a debit-like card to make purchases backed by your holdings. He plans to open for business June 1, likely the first of its kind in the country…
“…At the moment, Franco’s idea would generally be the only practical use of the law in Utah, given the legislation doesn’t require merchants to accept the coins, either at face value — $50 for a 1-ounce gold coin — or market value, currently almost $1,500 per ounce. And no one expects people will be walking around town with pockets full of gold and silver. ‘You’ve seen gold replacing these currencies as safety instruments,’ Zeman said. ‘If I don’t feel good about the dollar or other currencies, I’m putting my money in precious metals.'”
Alongside removing state capital gains tax on sales of coins, the law encourages the US Congress to also remove federal capital gains tax burdens. It “sends a strong signal to Congress and the Federal Reserve that their monetary policy is failing,” according to one opinion cited in the article. You can read more details in the Associated Press’ coverage of how gold and silver coins are becoming legal currency in Utah.