Florida studies use of gold and silver bullion as legal tender

A state study will determine how gold and silver bullion can be used as legal tender in Florida, Chief Financial Officer Jimmy Patronis announced last week.

Currently, gold and silver can be purchased as investment vehicles but cannot be used as money to buy goods and services. Mr. Patronis said his study is a major first step toward the potential use of gold and silver as money in the state, and would have the added benefits of being a tax-exempt hedge against inflation and devaluation of the US dollar.

“This is an exciting initiative that has the potential for enormous growth in our state,” he said. “Gold and silver have been trusted assets for thousands of years, and it makes perfect sense to use them as legal tender. I’m launching this study to determine the best way to get it done. I’ve also included in the framework of the study that gold and silver cannot be taxed as property for the purposes of using them as money.”

Gold and silver coins are now accepted as legal tender in 11 US states. Florida is not among them. Utah in 2011 became the first of them after 80 years in which gold was barred as legal tender throughout the nation, according to World Population Review.

The Florida Department of Financial Services, which Mr. Patronis oversees, will manage the study of allowing Florida to accept gold and silver bullion as legal tender, he said in a news release.

The primary focus, he said, will be the impact of gold and silver bullion – or physical gold and silver in bars, ingots and coins – as a form of currency within the state. Depending on the outcome, gold and silver could eventually serve as an alternative legal tender to Federal Reserve notes, or dollars, he said.

This would combat the effects of inflation, the release said, as the value of gold and silver typically increases during inflationary periods while the dollar loses purchasing power.

Using gold and silver as money, he said, could also create a healthy currency competition that would serve to reduce the harmful effects of any future central bank digital currency.

The release listed these aims by Mr. Patronis, all of which would require changes in current law:

■Gold and silver bullion would not be characterized as personal property for state taxation or regulatory purposes.

■The purchase or sale of any type or form of bullion would not give rise to any state tax liability.

■The exchange of one type or form of legal tender for another type or form of legal tender would not give rise to any state tax liability.

The study will also provide options for making gold and silver transactional in Florida, including proposed changes to existing regulations, the release said.

In addition, the study is to explore the numerous private attempts to establish electronic currencies backed by specie legal tender or bullion; the acceptance of gold and silver coins (or digital equivalents) to pay for private debts, taxes, and fees levied by the state or local government; and the history of gold and silver as currency in the US and document how individual states have used them as a form of money.