Texas Governor Greg Abbott has signed into law recognizing gold and silver as legal tender. House Bill 1056 will enable Texans to use gold and silver for everyday transactions. The law will allow individuals to deposit the precious metals at the Texas Bullion Depository in Leander and use a debit-card system to convert their holdings into U.S. dollars at the point of sale. The law will take effect on May 1, 2027.
Article 1, Section 10 of the U.S. Constitution permits states to recognize gold and silver coins as tender. Texan lawmakers are going back to adopting the gold standard, after it was ditched by the U.S. almost 50 years ago. The legislation directs the comptroller’s office to contract vendors for an electronic payment system, ensuring seamless conversion of gold or silver holdings at the time of purchase.
Over the next two years, state agencies will have to finalize infrastructure, regulations, and initiate pilot programs. The comptroller will have to issue guidance on transaction fees, vendor approvals, and data security protocols.
Supporters tout the law as providing a hedge against inflation and a more reliable form of payment than fiat currency. Republican state leaders and 76% of GOP voters backed the bill. However, bankers aren’t too sure about the move. They say that there could be challenges in integrating systems and have also raised concerns around the absence of merchant guarantees and consumer protection risks.
While the law permits, it doesn’t mandate, merchants accept gold or silver, making adoption of such a move voluntary. The rollout will test how alternative money can function within a modern economy. If successful, other states could borrow a leaf and follow suit.