Gold and Silver as Legal Tender: Florida Moves Toward Greater ‘Financial Freedom’
Through his new bill, Florida Governor DeSantis wants Floridians to be able to use physical gold and silver as an official means of payment by making them legal tender. The bill, as DeSantis labelled it, is a move to protect residents from the growing fiscal uncertainty in the US and a weakening US dollar, stating “this is our ability to give you financial freedom to be able to protect yourself again the declining value of the dollar”.
On May 27th, Florida Governor Ron DeSantis signed the bill "HB 999", a legislation which would officially recognize physical gold and silver as “legal tender”, meaning they would be recognized by law as a way to settle private or public debt or as a means for paying off financial obligations. In other words, gold and silver could be used in certain transactions as it allows business to accept them as payment.
According to the Florida Senate, legal tender coins need to be clearly marked with purity, weight, and the mint where they originate from. The legislation also dictates that gold or silver meeting these requirements and deemed legal tender would be exempt from Florida state sales tax. A state representative, Bill Bankson, said the goal was to “eliminate the tax burden and make gold and silver a functional means of transaction between willing parties”.
Despite the governor’s approval, the law still needs to be ratified by the state legislature, which if approved, would go into effect on July 1, 2026.
Florida will potentially join Oklahoma, Utah, Wyoming, and several other states in recognizing precious metals as an alternative currency option and pushing back on federal monetary policy.
This “fiscal uncertainty” of a declining dollar and a need for “financial freedom” for Americans that Governor DeSantis refers to are all problems stemming from the end of the gold standard, where the US government ended any control there was over the printing of money.
Departure from the Gold Standard
During World War I, many industrial nations temporarily abandoned the gold standard to allow for increased money printing to finance the war. Returning to a gold standard afterwards proved difficult as financial instability led to divergent monetary policies, eventually leading to the Great Depression.
In the U.S., Herbert Hoover’s presidency, 1929 – 1933, initially supported a strict adherence to the gold standard, but the financial crisis worsened, leaving many economic experts to look for more flexibility to monetary policy.
As most American “gold bugs” are well aware, the move away from the gold standard started back in 1933 when the then US president, Franklin D. Roosevelt, signed the Executive Order 6102, which basically made an American an outlaw (and unpatriotic) if they privately owned gold bullion or coins. Other nations soon followed, which transitioned to the fiat currency system we know today.
The “nail in the coffin” came in 1971, when President Richard Nixon officially ended the US dollar’s convertibility to gold. The gold standard was done, not only in the US but everywhere, leaving all of us to the whims of governments and central banks we have today.
While the end of the gold standard gets most of the attention, it is worth touching on the unsung hero, silver. Silver, like gold, dates back thousands of years as having been used as money, and one could argue it was the real basis of domestic economies for centuries.
A silver standard monetary system first grew out of the Spanish Empire in the 16th century, but as large international trade grew over time, the physical weight of silver coins grew excessive and to maintain any kind of parity of a currency with metal value compared to the “low value” of silver, using silver became impractical, meaning more lightweight coinage grew in favor.
The world largely transitioned to a gold standard during the 1700 and 1800’s. For the US, the Coinage Act of 1873 took the United States off of a silver standard by officially ending the minting of silver bullion into silver dollars. The last silver standard was held by Hong Kong and China, abandoned in 1935 (at which time, as discussed, most nations were already on a gold standard).
The Problems with Intrinsically Worthless Money
The end of the gold (and silver) standard has given governments and central banks more flexibility to fight inflation, reduce debt, and stimulate international trade, as was shown through recent examples like the 2008 financial crisis or Covid. But without being tied to any intrinsic value, politically driven miscalculations, excessive money printing, and uncontrolled debt have escalated rapidly. And we, dear readers, are mercilessly exposed to the consequences today.
Americans, amongst others for instance, have faced steadily rising national debt since the 1980s to the unprecedented heights we see now. Today's global monetary system is based solely on artificially constructed values, upheld by nothing but mere trust. Many modern investment instruments rest on this fragile foundation and can quickly collapse when this trust is shaken or destroyed. This typically happens in volatile periods that are very hard to navigate for central banks and private investors alike, sending them back into the safe haven of tangible assets, as has been demonstrated by gold’s sharp price increase lately.
Gold and Freedom
Florida’s possible return to an alternative, intrinsically valuable means of payment would give citizens greater independence from federal monetary policies and the strategies of the central bank. It reminds one of a quote by Ludwig von Mises where he saw a direct link between gold and freedom: “The gold standard was the citizen's guarantee of freedom. It limited the government's power to inflate, to spend, and to borrow.”
Of course, gold and silver being legal tender will certainly not change things overnight, so it isn’t time to break the seal on that monster box of 500, 1oz American Eagle silver coins you’ve been storing in your safe at home.
Practically speaking, while gold and silver may carry legal tender status in Florida and other states, don’t expect to run to your local grocery store and pay for your bread and milk in silver dollars. The law recognizes these metals as money but doesn’t force businesses to accept them. Then there is a question of how a retailer would verify the authenticity of a coin or calculate real-time values when spot prices change regularly throughout the day. Businesses would need specialized equipment and training. These only scratch the surface of the list of questions that we have on how this would work.
Still, it is a move in a right direction, if even symbolically, as it shows citizens are unhappy with the way the federal government and central banks are acting. Governor DeSantis, in an X post, proclaimed that his aim was to strengthen economic self-determination and allow Floridians to protect themselves from the federal government’s “reckless spending addiction”. “Precious metals could start functioning like real currency again, not just investment vehicles for the wealthy”.
Frankly, for many of us physical precious metals holders, it supports just one of the reasons why we’ve been buying and holding physical metals all along.
