OKLAHOMA CITY, Okla. (Feb. 25, 2025) – Today, a second Oklahoma House committee passed two bills that would significantly expand the types of gold and silver recognized as legal tender in the state, and establish a 100 percent gold and silver-backed transactional currency.
Rep. Cody Maynard and Sen. David Bullard filed House Bill 1199 (HB1199). This legislation would improve and expand the state’s recognition of gold and silver as legal tender. The duo also filed House Bill 1197 (HB1197) to establish a mechanism for a transactional currency backed 100 percent by gold and silver.
Today, the House Government Oversight Committee passed HB1197 by a vote of 13-3 and HB1199 by a vote of 12-4. On Feb. 11, the House Banking Financial Services and Pension Committee passed both bills by an 8-0 vote.
Both bills now move to the full House for debate and a vote.
GOLD AND SILVER AS LEGAL TENDER
In 2014, Oklahoma took the first step and declared gold and silver coins issued by the United States government are legal tender in the State of Oklahoma. HB1199 would significantly expand that definition of legal tender to include “other specie that an Oklahoma court rules to be within state authority to make or designate as legal tender.” This would set the stage to increase the types of gold and silver coins and bullion considered legal tender.
This is the approach that Utah took, and as a result, the state has built what is likely the most robust foundation for the advancement of gold and silver as money in the United States.
Language in HB1199 would also explicitly define legal tender as “a recognized medium of exchange for the payment of debts and taxes.” In effect, this would require the state to accept gold and silver for payment of taxes, fees, and other obligations.
Oklahoma is among five states that have legally recognized gold and silver as legal tender, as they always should have been doing. Utah led the way, reestablishing constitutional money in 2011. Wyoming, Oklahoma, Arkansas, and Louisiana have since joined.
REMOVING TAXES
Under HB1199, specie legal tender would be exempt from all forms of taxation.
“The purchase, sale, or exchange of any type or form of specie shall not give rise to any tax liability in this state.” This clause would also specifically repeal the state’s capital gains tax on gold and silver bullion.
Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs.
Oklahoma is already one of 45 states that do not levy sales tax on gold and silver bullion. Exempting the sale of bullion from capital gains taxes takes another step toward treating gold and silver as money instead of commodities. Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs.
Imagine if the IRS sent you a bill every time the dollar strengthened against the euro. That’s effectively what capital gains taxes on gold and silver do. As the precious metals prices go up due to the devaluation of the dollar, the government levies a tax on you. It is essentially a tax on the superior performance of gold and silver as money.
“We ought not to tax money – and that’s a good idea. It makes no sense to tax money,” former U.S. Rep. Ron Paul said during testimony in support of an Arizona bill that repealed capital gains taxes on gold and silver in that state. “Paper is not money, it’s fraud,” he continued.
GOLD CONTRACT CLAUSE
HB1199 also specifies, “If a valid contract expressly designates a type or form of specie as tender, then an Oklahoma court asked to adjudicate the breach of such a contract shall require, as a remedy for the breach, the specific performance of tendering the type or form of specie specified in the contract.”
In practice, including this contract clause means if parties voluntarily agree to be paid, or to pay, in gold and silver coin or bullion, the Oklahoma courts could not substitute any other thing, e.g. Federal Reserve Notes, as payment.
The principle behind a gold clause contract is simple. It requires that payment must be made in a specific amount of gold or its paper equivalent. For example, a mortgage might stipulate that repayment must be in the form of 30 ounces of gold. Gold clauses protect the parties to a contract from currency debasement, and incentivize the use of sound money.
TRANSACTIONAL CURRENCY
HB1197 would allow the state treasurer to issue a transaction card that enables Oklahoma residents to make purchases using gold and silver deposits held in a state-approved bullion depository. The treasurer’s office could either establish this depository or contract with public or private entities to operate it.
The bill specifies that gold and silver deposits, along with electronic transactions 100% backed by these metals, “shall be considered legal tender.”
If passed and implemented, this system would function much like a traditional debit card, seamlessly converting gold and silver holdings into fiat currency at the point of sale. Individuals and businesses could use it to make everyday purchases, just as they would with a bank account.
By enabling transactions backed by gold and silver, HB1197 would provide an alternative to the fiat dollar, offering a way to protect purchasing power from inflation and currency devaluation.
IN PRACTICE
Practically speaking, recognizing gold and silver as legal tender and creating a gold/silver-backed transactional currency would allow Oklahoma residents to use gold and silver as money rather than as mere investment vehicles.
Passage of HB1199 and HB1197 would represent another step against the fiat-based Federal Reserve system by creating a foundation to pull the rug out from under it on the state and local levels. In essence, it would set the stage for the people themselves to undermine the Federal Reserve monopoly by introducing competition into the monetary system.
The next step would be for people to start taking advantage of the status of gold and silver as money by using both as such instead of Federal Reserve notes.
The effect has been most dramatic in Utah where the Specie Legal Tender Act opened the door for the development of a robust gold and silver economy in the state. With some legal hurdles cleared away by the state’s legal tender law, the United Precious Metal Association (UPMA) in partnership with Alpine Gold Exchange set up the state’s first “gold bank.”
The act also led to the creation of the Goldback, a local, voluntary medium of exchange. Goldbacks are notes made from fractions of an ounce of physical gold. The company created a process that turns pure gold into a spendable physical form for small transactions.
New Hampshire also boasts a thriving gold and silver economy. While the state does not officially recognize bullion as legal tender, this has not deterred thousands of residents from using it in private transactions. Because there are no state tax barriers on precious metals, a favorable tax climate – combined with a population willing to embrace sound money – has positioned New Hampshire as another model for others to follow.
BACKGROUND
The United States Constitution states in Article I, Section 10, “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts.” Currently, all debts and taxes in most states are either paid with Federal Reserve Notes (dollars) which were authorized as legal tender by Congress, or with coins issued by the U.S. Treasury – very few of which have gold or silver in them.
The Federal Reserve destroys this constitutional monetary system by creating a monopoly based on its fiat paper currency. Without the backing of gold or silver, the central bank can easily create money out of thin air.
This not only devalues your purchasing power over time; it also allows the federal government to borrow and spend far beyond what would be possible in a sound money system. Without the Fed, the U.S. government wouldn’t be able to maintain all of its unconstitutional wars and programs. The Federal Reserve is the engine that drives the most powerful government in the history of the world.
State bills that facilitate and encourage the use of sound money create a playing field where people can push back against the Fed’s monetary malfeasance. Ultimately, it could create a scenario where people can drive out the “bad” fiat money with “good” sound money.
WHAT’S NEXT
HB1199 and HB1197 can now move to the House floor for further consideration.
