New state laws pave the way for using gold as legal tender

Imagine you’re in the supermarket checkout line. The cashier scans and bags your groceries as usual, then offers you a new way to pay: “Cash, card … or gold?”

The scenario may sound far-fetched. But people in Missouri, Texas, and other states will be able to buy household items with gold and silver under a series of new laws that treat precious metals like currency.

Supporters of the measures — among dozens of gold- and silver-related bills considered by states this year — don’t envision people pulling out gold coins and bullion bars at the cash register and don’t require that retailers accept gold as payment. The bipartisan laws are instead designed to make it easier and cheaper for people to spend their gold investments — including by allowing officials to set up electronic payment platforms and by challenging the federal capital gains tax on precious metals.

Missouri enacted a legal tender law earlier this month. Texas, Florida, and Arkansas approved similar measures in June, May, and April, respectively.

Texas resident Cindi Castilla likes the idea. Had she needed to sell stock holdings to make a big payment in April, when markets plummeted, “I would have taken a big hit at that moment, having to sell low,” said Castilla, who is president of Texas Eagle Forum, a conservative group that backed the Texas bill. “But my gold bounced up a little bit during that crazy period.”

The recent spate of gold- and silver-related laws are partly driven by skepticism about the strength and durability of the U.S. dollar and mistrust of federal financial policy. They have gained steam as the dollar’s value has declined and as new technologies have made it possible to invest in and buy precious metals without ever holding physical nuggets of gold, industry observers said.

The U.S. dollar index this year saw its biggest half-year decline since the 1970s. Meanwhile, bitcoin and gold spot prices have reached record highs, as investors and central banks flock to the safe-haven asset.

People want “different ways to pay, different ways to hedge against inflation,” said Mike Carter, an advocate for the new laws and co-founder of the National Security Investment Consultant Institute. “I think that’s the movement that we’re seeing certainly across America.”

The Sound Money Defense League, a group that for 11 years has advocated for gold- and silver-related measures — including removing taxes on precious metals and building up state gold reserves — has seen “overwhelming” interest in those proposals lately, chairman Stefan Gleason said. While a few such bills were introduced annually in the past, more than 30 were proposed in each of the last three years, including 60 so far in 2025, he said.

Despite the surge in interest, some tax and economics experts doubt the legal tender laws will change much because gold prices fluctuate, and transactions can generate capital gains taxes that exceed those from stocks and other investments.

“Who wants to hold a money that is taxed?” said Gabriel Mathy, an economics professor at American University.

He views the laws as largely a “political hobby horse” for people who want to return to the gold standard — a system where currency is backed by the precious metal rather than the government.

Utah was the first state to pass a gold legal tender law in 2011. About 10 states have followed suit. The early measures were largely symbolic because there weren’t easy ways to spend gold: “How am I supposed to buy groceries or put gas in my car with a gold bar?” Texas State Rep. Mark Dorazio, a Republican, said at a committee hearing in March.

Technology has changed that, industry observers say. Private companies now offer ways to sell and exchange gold electronically using apps or debit cards.

A company called Glint Pay issues cards that are backed by account holders’ gold stored in Swiss vaults. Retailers can swipe the cards like a Visa or American Express, similar to charging an American bank card for a purchase in London, chief executive Jason Cozens said: “All that happens is the dollars are converted into the currency of the merchant — in this case, pounds.”

The state laws allow their governments to set up similar systems. Private companies including Glint could be hired to store residents’ gold or to build electronic platforms that would enable payments, but many details must still be worked out. In Florida, lawmakers will need to approve rules drafted by state financial officials before they take effect.

Supporters of the measures say they give people a way to buy and spend gold without making large outlays or investing in an exchange-traded fund.

“Exchange-traded funds can’t be used at the grocery store,” said Kevin Freeman, an advocate of legal tender laws who wrote the book Pirate Money.

Some proponents expect the Texas law will be challenged in court but believe it will stand up to scrutiny.

“We are confident that when gold and silver are used in this fashion, they will be deemed nontaxable from a capital gains perspective,” Freeman said.

The Internal Revenue Service and Treasury Department did not respond to a request for comment.

Some officials worry about depleting state revenue or the cost and logistics of precious-metal transactions. Utah Gov. Spencer Cox (R.) this year vetoed a bill that would let vendors be paid in precious metals. Kentucky Gov. Andy Beshear (D.) rejected a measure that lets buyers sue to recoup sales taxes they previously paid for gold; lawmakers overrode his veto.

Other critics say private companies can meet the demand for gold-payment systems without government involvement.

“We don’t see a compelling state need to enter that space,” said Kim Coleman, who works with Goldback, a company that produces eponymous bills that merchants can choose to accept; a 1 Goldback contains one-one thousandth of a troy ounce of gold.

Groups representing banks and credit unions have also raised concerns about the lack of consumer protections and the potential to divert cash deposits from community banks.

“What if there are transactional disputes?” said Chris Furlow, president of the Texas Bankers Association. “If there’s fraud, who makes the customer whole?”

“You’re not going to find bitcoin investors or gold speculators making [agricultural] loans in the Texas panhandle,” he said.

Still, some tax and finance experts expect the laws will have little effect.

People concerned about inflation can already invest in gold, including through exchange-traded funds, and can easily sell holdings to make a purchase, said David Musto, finance professor at the University of Pennsylvania’s Wharton School.

The new laws are “making it easier to do this thing that you can already do,” he said. “The real barrier is the tax consequences.”

Axing the federal capital gains tax on gold would require a change in law, and could push people away from the dollar and toward metals, if they are treated like legal tender, said Omri Marian, a professor at the University of California at Irvine who studies federal tax law. But moving the United States away from Federal Reserve control over the money supply is a tall order.

“Why would the government want to give up its ability to do monetary policy?” Marian said. “Why would the government want people to invest in gold and silver … [rather than] stock of corporations that operate in the United States?”