OKLAHOMA CITY, Okla. (March 25, 2025) – The Oklahoma House passed two bills to significantly expand the types of gold and silver recognized as legal tender in the state, and to establish a 100% gold and silver-backed transactional currency supported by a bullion depository.
Rep. Cody Maynard and Sen. David Bullard filed House Bill 1199 (HB1199) to expand Oklahoma’s definition of legal tender to include gold and silver bullion, exempt specie from taxation, and require courts to enforce gold clause contracts. The duo also filed House Bill 1197 (HB1197) to establish a 100% gold and silver-backed transactional currency through a state-authorized bullion depository and issue a “transaction card” for everyday use.
GOLD AND SILVER AS LEGAL TENDER
In 2014, Oklahoma took the first step and declared that gold and silver coins issued by the United States government are legal tender in the State of Oklahoma. HB1199 would significantly expand that definition to include gold and silver bullion. It also allows courts to recognize “other specie” as legal tender if ruled within the state’s authority. This opens the door to a wider range of coins and bullion being used as money in the state.
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.
HB1199 also defines legal tender as “a recognized medium of exchange for the payment of debts and taxes.” This would require the state to accept gold and silver for taxes, fees, and other payments.
The House passed HB1199 by a 73-15 vote on March 25.
Oklahoma is one of six 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, Louisiana, and Idaho have since joined.
REMOVING TAXES
HB1199 would exempt specie legal tender from all forms of taxation.
“The exchange of one type or form of legal tender for another type or form of legal tender shall not give rise to any tax liability.” This clause would also specifically repeal the state’s capital gains tax on gold and silver specie.
Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs – discouraging use.
Oklahoma already exempts gold and silver bullion from sales tax. Exempting the sale of bullion from capital gains taxes takes another step toward treating gold and silver as money instead of commodities.
Imagine if the IRS taxed you every time the dollar gained against the euro. That’s what capital gains taxes on gold and silver effectively do. As precious metals rise with dollar devaluation, the government penalizes you – essentially taxing sound money for doing its job.
“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, this means if parties agree to pay or be paid in gold or silver, Oklahoma courts couldn’t substitute anything else – such as 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 authorize the state treasurer to issue a “transaction card” tied to gold and silver deposits held in a state-approved bullion depository. The treasurer could either create the depository or partner with public or private entities to manage it.
The bill specifies that gold and silver deposits, along with electronic transactions 100 percent backed by these metals, “shall be considered legal tender.”
The House passed HB1197 by a 77-15 vote.
If implemented, the system would work like a debit card, converting gold and silver holdings into fiat at the point of sale.
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.
The 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
HB1197 and HB1199 will move to the Senate for further consideration. They will be assigned to a Senate committee where they must get a hearing and pass by a majority vote before moving forward in the legislative process.
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