Texas Recognizes Gold Silver as Legal Tender Starting 2027

Texas has taken a significant step towards recognizing gold and silver as legal tender, following Governor Greg Abbott's approval of House Bill 1056. 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 effort by the Texas government to explore alternative forms of currency. Under the leadership of Governor Abbott and the Republican-led legislature, the state has also moved forward with bills proposing the adoption of cryptocurrencies such as Bitcoin (BTC). On the same day he signed House Bill 1056 into law, Abbott approved legislation for the creation of a state strategic BTC reserve. This dual approach to recognizing both precious metals and digital currencies reflects a growing interest in diversifying the state's financial landscape.

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. The recent legislation in Texas suggests a potential shift towards recognizing digital currency backed by gold or silver as legal tender, though this remains speculative.

Some Texas residents have expressed skepticism about the practicality of using gold and silver as legal tender. Concerns have been raised about the authenticity of gold or silver coins and the potential challenges for retailers in accepting them as payment. Reddit user the_shootist, for example, questioned how retailers would protect themselves from counterfeit coins and ensure the viability of such a system. These concerns highlight the complexities involved in transitioning to a system that recognizes precious metals as legal tender.

Several other US states already recognize precious metals like gold as legal tender, but do not require retailers to accept them as payment. Businesses in certain states have been accepting gold notes called “Goldbacks” as payment, though these do not qualify as legal tender backed by the state or federal government. The move by Texas to recognize gold and silver as legal tender could set a precedent for other states considering similar legislation, though the practical implications and challenges remain to be seen.