Texas advances measure to allow residents to use precious metals for daily transactions

The Texas legislature took another step this year to allow residents to use gold and silver as legal tender.

HB 1056, filed by State Rep. Mark Dorazio, R-San Antonio, requires the state comptroller “to establish and issue a currency based on gold and silver that can be used as legal tender in the payment of debt and can be transferred electronically,” according to the bill analysis.

It passed the House and Senate in May, with amendments, and was signed into law by Gov. Greg Abbott in June.

The action was taken 10 years after Abbott signed into law HB 483, which created the Texas Bullion Depository.

In doing so, Abbott was the first governor and Texas was the first state to create a state-administered precious metals depository in the country.

Since that time, the depository has been largely underutilized, Dorazio argues. While many Texans have purchased gold and silver, there are few options to use it in everyday life.

As inflation increased under the Biden administration to 40-year highs, eroding the value of the U.S. dollar, Americans saw the sharpest decline in purchasing power in 2022 since 1980, the bill analysis states. The new law will allow the comptroller to “leverage existing technology to make the Texas Bullion Depository more accessible and functional for citizens,” Dorazio said. “This system would give Texans a practical hedge against inflation while enabling commerce through a secure, gold-backed currency. The state would charge a service fee to cover administrative costs and potentially generate a financial return.”

Under the U.S. Constitution, states are authorized the use gold and silver as currency. Article 1, Section 10 states, “No state shall coin money, emit bills of credit, or make anything but gold and silver coin a tender in payment of debts.”

Last year, Republican primary voters overwhelmingly supported the state authorizing gold and silver to be used as currency. They passed Ballot Proposition 7, “The Texas Legislature should establish authority within the Texas State Comptroller’s office to administer access to gold and silver through the Texas Bullion Depository for use as legal tender.”

Allowing gold and silver to be used as legal tender is also part of the Republican Party of Texas platform. Its Plank 32 states, “Texas should recognize the natural right to use currency of choice in the Texas Bill of Rights and provide choices for ordinary Texans to use gold and silver in everyday transactions. The State of Texas shall prohibit the use of Central Bank Digital Currencies (CBDC) for use as legal tender to conduct private and commercial transactions or to settle debts, public or private. The State of Texas does not recognize the authority of the Federal Reserve Bank or the United States Treasury to create or implement Central Bank Digital Currencies as legal tender consistent with the provisions delegated to the Federal Government under Article 1, Section 8, of the Constitution of the United States of America.”

Republican state Rep. Andy Hopper, who coauthored the bill, said it was one of his favorite bills the legislature passed this year “because it secures Texas’ financial sovereignty.”

It allows Texans to deposit U.S. dollars into the depository electronically through “direct deposit however you want it to work. Once that money goes in, the state of Texas is required to go and acquire gold to satisfy that deposit,” he explained. Deposited funds would be in ounces of gold.

Texans would then be able to “use a debit card or electronically withdraw that money and transfer it back into dollars, or if a vendor supports it, you can directly pay for the product in ounces of gold out of the Texas Gold Depository,” he said.

“It is inflation proof. You do not have to pay capital gains,” he said. “The new system will protect Texans against a future loss of the U.S. dollar as the world reserve currency because here in Texas you will have a transactional gold currency that will not fluctuate according to hyperinflation.”

The law becomes effective May 1, 2027, in order to allow the comptroller’s office to implement policies, procedures and regulations. Section 2116.101 of the law becomes effective Sept. 1, 2026.