Texas Recognizes Gold Silver as Legal Tender from 2027

Texas has taken a significant step towards recognizing gold and silver as legal tender, following the approval of House Bill 1056 by Governor Greg Abbott. The bill, which is set to take effect on May 1, 2027, amends the state government code to allow residents to use gold and silver in everyday transactions based on the comptroller’s determined value at the time. This move aligns with a clause in the US Constitution that states no state shall “make any thing but gold and silver coin a tender in payment of debts.” However, the law does not prohibit the use of Federal Reserve notes or other US currency as legal tender in Texas, nor does it require any person to accept gold or silver for the payment of a debt, for deposit, or for any other purpose.

Governor Abbott's approval of this bill comes as part of a broader initiative by the Texas government to explore alternative forms of currency. On the same day, Abbott also approved legislation for the creation of a state strategic Bitcoin reserve. This move towards recognizing cryptocurrencies and precious metals as legal tender reflects a growing trend among some US states to diversify their financial systems and reduce reliance on traditional fiat currency.

The United States has been off the gold standard for day-to-day domestic transactions since 1933, when President Franklin D. Roosevelt signed an executive order requiring people to return “gold coin, gold bullion, and gold certificates” to the Federal Reserve. While individual states like Texas have been exploring the adoption of different assets, they are barred from issuing notes and coins under the Constitution. This new law in Texas does not change this constitutional restriction but allows for the use of gold and silver as legal tender in the state.

Some residents have expressed skepticism about the practicality of using gold and silver as legal tender. Concerns have been raised about the authenticity of gold and silver coins and the potential challenges for retailers in accepting these precious metals as payment. Reddit user the_shootist, for example, questioned how retailers would be able to ensure that the gold or silver coin is authentic and not a counterfeit. These concerns highlight the complexities involved in implementing such a system and the need for robust mechanisms to verify the authenticity of precious metals.

Several other US states already recognize precious metals like gold as legal tender, but they do not require retailers to accept them as payment. Businesses in certain states have been accepting gold notes called “Goldbacks” as payment, though they do not qualify as legal tender backed by the state or federal government. The recognition of gold and silver as legal tender in Texas could pave the way for similar initiatives in other states, further diversifying the financial landscape in the US.