By James Bickerton
Texans are to be allowed to pay with with gold and silver for everyday transactions after Governor Greg Abbott signed House Bill 1056 into law. The law, which was championed by Republican state representative Mark Dorazio, designates the precious metals as legal tender in the state.Texans will be able to use their gold and silver holdings, stored in the state’s bullion depository, for payments through electronic systems such as mobile apps or debit cards.The provision comes after legislative debate, and takes effect on May 1, 2027, enabling transactions based on the state comptroller’s valuation of the metals at the time of sale.Newsweek contacted Abbott and Dorazio for comment – via email and online inquiry form respectively – on Wednesday outside regular office hours.Why It MattersThe decision by Texas lawmakers to recognize gold and silver as functional money marks a significant experiment in alternative currency in the United States. For decades, the U.S. has operated on fiat currency, and while federal law already recognizes U.S. gold and silver coins as legal tender, their actual commercial use has been rare and logistically challenging.Supporters, like Dorazio, say the move provides Texans with added protection from inflation and expands financial autonomy beyond federally backed dollars. The Republican also cited the Bible in his efforts. Chron, a Houston-based news outlet, quotes him as saying: “If you go back to the scripture in Genesis 2, it gives you a reason how God intended us to be able to effectively engage in commerce. And that reason was: ‘In the land of Havilah, I place the gold.'”Critics, including industry groups and independent observers, warn of substantial costs, legal complexities, and potential consumer risks associated with managing gold- and silver-based transactions.How Will Payments Using Gold and Silver Work?The bill authorizes the Texas comptroller to establish electronic payment systems for gold and silver held in the state depository. Consumers will not spend physical gold and silver coins or bars, but rather use digital systems representing their holdings.The new legislation does not require merchants to accept gold or silver for transactions, not does it eliminate U.S. currency. Consumers may choose to continue standard payments.An earlier version of the bill would have created a new gold- and silver-based digital currency, but this component was removed before it passed the Texas Legislature.According to Chron, the bill was opposed by both the Texas Bankers Association and the Independent Bankers Association due to consumer protection concerns.What People Are SayingOn Sunday Governor Abbott wrote on X, formerly Twitter: “I signed a law authorizing Texans to use gold & silver as legal tender in day-to-day financial transactions.”It fulfills the promise of Article 1, Section 10 of the U.S. Constitution.”Article 1, Section 10 of the Constitution states that no American state can “make any Thing but gold and silver Coin a Tender in Payment of Debts.”Speaking to the Dallas Morning News, Dorazio said: “In short, this bill makes gold and silver functional money in Texas. It has to be functional, it has to be practical and it has to be usable.”Where Else Are Gold and Silver Legal Tender?Other states such as Utah and Arizona have recognized gold and silver as legal tender. However, these measures are largely symbolic; most states do not require or provide the infrastructure for retail transactions using precious metals. The practice remains rare outside Texas.In May, Republican lawmakers in Missouri added an amendment to a broader finance bill that would make gold and silver legal tender in the state.The value of gold soared to an all time high on April 1 amid traders’ concerns over President Trump’s tariff policy, strengthening the precious metal’s reputation as a relative safe haven.What Happens Next?House Bill 1056 is due to come into effect on May 1 2027.On the same day Abbott signed House Bill 1056, he also approved Senate Bill 21, which instructs the creation of a new Texas Strategic Bitcoin Reserve to hold the cryptocurrency among its financial portfolio.