Could gold & silver become currency in Florida? CFO Patronis supports the move

Using gold and silver as currency

Kylie Jones reports

TALLAHASSEE, Fla. - Precious metals like gold and silver are not legal tender under current Florida law. If the state's chief financial officer gets his way, however, that could change.

Florida CFO Jimmy Patronis, who's also running for a vacant seat in Congress, is launching a study to help figure out how gold and silver could be used to buy goods and services in the state.

FILE: Gold and silver

The study, which will be conducted by the Florida Department of Financial Services, will focus on physical gold and silver in the form of bars and coins.

Why precious metals?

Supporters of making gold and silver legal forms of currency argue that precious metals serve as a viable alternative to the U.S. dollar and other "fiat currencies," or money that is not pegged to a physical commodity to determine its value.

"This is an exciting initiative that has the potential for enormous growth in our state. Gold and silver have been trusted assets for thousands of years, and it makes perfect sense to use them as legal tender," Patronis said in a statement released Wednesday.

The proposal includes certain tax exemptions, as well, including making sure gold and silver are not taxed as personal property.

Shawn Clark, a financial advisor with Mosaic Financial Group, says gold-backed currency has benefits and drawbacks.

"I think a lot of Americans have been looking for some more independence," Clark said.

Clark says gold and silver currency could help with inflation.

"There's only a certain amount of gold, and so, they typically work well in inflationary times just because, as the price of things goes up, so does the price of gold," Clark said. "So that's where, yeah, if milk goes up a dollar, well, so does your price of gold. It goes up a dollar."

FILE-Gold bullion bars are pictured after being inspected and polished at refinery in 2020. (Photo by DAVID GRAY/AFP via Getty Images)

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However, Clark says the idea of gold and silver currency doesn’t come without unique challenges.

"You’re going to have to get businesses to buy in on this as well," Clark said. "And, they're going to have to accept this type of gold or silver-backed currency."

Marc Bonnett, the owner of Tampa Bay Coin & Precious Metals, says integrating gold and silver currency into daily life is much more challenging than it may appear.

"To me, it would be very difficult to make this happen on a day-to-day basis," Bonnett said.

Bonnett works with gold and silver daily and says there’s a process for valuing each coin or piece of gold or silver.

"I would think you'd have to have a specialist at every store and every register, and you'd have to test this stuff because obviously, anything that has value, they'll fake everything," Bonnett said. "They fake Rolex watches. They fake gold coins. They fake everything that has value."

He says gold currency is a good idea in theory, but it would be complicated to monetize it for daily use.

FILE: Silver coin

"You have to know how much gold is in the bar, and then you have to have the gold spot, and then you have to know the percentage of gold you can pay them out at," Bonnett said.

Clark says several other states around the country have adopted gold and silver as a form of currency. But he says we will most likely not see the use of gold and silver currency in Florida in the immediate future.

"Having a diversified way to pay for things is going to be a nothing but a good thing," Clark said. "But do we see, you know, credit cards and dollar bills going away anytime soon? My expectation would be no. Not for a long time."

Clark says the tax exemptions that the CFO proposed for gold and silver currency could benefit consumers.

"It looks like there would not be sales tax, which would be game-changing for consumers," Clark said. "But how would that impact local government? You know, that that would be a huge impact on local government."

Click here for the full announcement from Patronis.

The growing push for gold & silver

At one time, the U.S. dollar was under the "gold standard," meaning gold was used to back the federal currency. Gold has not been exchanged for U.S. dollars, however, since 1971, according to the Federal Reserve.

Since 2011, several states have passed legislation allowing gold and silver to be spent as legal tender. Utah was the first to do so, opening the door for other states including South Carolina, Louisiana and Oklahoma to approve similar measures.

What's the price of gold & silver?

As of midday Wednesday, gold futures were valued at $2,757 per ounce, near the all-time high reached in late October.

Silver was just shy of $33 per ounce on Wednesday. According to Nasdaq, silver's all-time record price was $49.95 per ounce in January 1980, although it soon crashed on what became known as "Silver Thursday."

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