Gold as Money

Over time, gold evolved from a symbol of wealth to the foundation of global monetary systems, with its universal acceptance making it the first actual international currency. In the United States, gold is not legal tender and is not commonly used as a medium of exchange; transactions are generally conducted in U.S. dollars, though private barter using gold can occur by mutual agreement. Current and proposed sound money policies might enable gold to be used as widely as the USD.   

Historical Foundations of Gold as Currency 

Gold has been used by the most powerful and minute countries and civilizations. The Lydians (in modern-day Turkey) were among the first to mint standardized gold coins around 600 BCE. Empires such as Rome, Persia, and Byzantium tied their economic power to gold.   

After Emperor Augustus's monetary reforms in Rome, the aureus was traded throughout the known world, from Britain to India, due to its reliable gold content. Julius Caesar instituted the use of gold coins in greater quantities with the minting of the 8g gold aureus.  

The Byzantine solidus gold coin was widely used throughout Europe, the Mediterranean, and the Middle East during the early and high Middle Ages. 

The Evolution of Gold Usage in the United States 

Long after the Byzantine Empire, precious metals used in monetary transactions held steady worldwide. However, in the United States and other nations, how we viewed gold and its use in our economy evolved.  

The relationship between gold and the U.S. dollar dates back to the Coinage Act of 1792, which tied America’s currency to both gold and silver. More than a century later, in 1900, President William McKinley signed the Gold Standard Act, formally designating gold as the nation’s sole monetary foundation.  

The Gold Standard formally linked paper money to gold reserves, guaranteeing redemption for a fixed amount of metal. The Classical Gold Standard (1870–1914) established global economic stability and low inflation. Nations like the UK and the US tied their currencies to gold, fostering international trust.  

During the Great Depression, President Franklin D. Roosevelt took dramatic action through Executive Order 6102, which required citizens to surrender most privately held gold coins, bullion, and certificates to the Federal Reserve Bank in exchange for paper money. Certain exemptions were made, but this move effectively centralized gold ownership under federal control.  

After World War I, the system weakened as governments printed money to fund war debts. Under the Bretton Woods Agreement, signed by 44 nations, the U.S. dollar served as the global reserve currency, while gold was fixed at $35 per ounce. Other countries pegged their currencies to the dollar, which was in turn backed by U.S. gold reserves until the system unraveled in the early 1970s. 

The “Nixon Shock” & Stagflation 

In 1971, President Richard Nixon announced what became known as the “Nixon Shock,” ending the convertibility of U.S. dollars into gold. This decision dissolved the link between gold and currency, ushering in the modern fiat monetary system and leading to the breakdown of the Bretton Woods arrangement.  

Stagflation is a period in which an economy experiences inflation, slow economic growth, and high unemployment. From 1971 to January 1980, the U.S. experienced economic stagflation. After the U.S. ended the gold standard in 1971, gold rose nearly 2,000% ($35 per ounce in 1970 to roughly $850 around 1980). From 1971 to 1980, the economy was suffering due to oil crises, supply shocks, expansive fiscal policies, and other issues. 

Gold’s Monetary Power 

Listed are different economic crises that became less severe when gold was used to intervene:  

• Germany, 1923: Hyperinflation made the mark worthless; gold and foreign currencies became the only trusted mediums.  

• Zimbabwe, 2008: Similar hyperinflation led citizens to trade in gold dust and jewelry.  

• Venezuela, 2018 - present: As hyperinflation eroded the bolívar, de facto dollarization took hold, while the government sold portions of its gold reserves to raise hard currency.  

• When governments overprint money or engage in quantitative easing, gold often rallies. During the 2008 financial crisis, for example, gold acted as an insurance policy against systemic risks.  

During the United States Government Shutdown in 2025, gold served as a refuge during episodes of monetary manipulation, political instability, and loss of confidence in institutions. The shutdown created a risk environment similar to past crises, prompting increased demand for gold as a hedge against potential economic upheaval and policy uncertainty. The shutdown hindered the release of economic data and disrupted the Fed's policy decisions, further fueling investors' preference for gold and reinforcing its role as a safe store of value during periods of systemic distress. 

Gold and Inflation: Purchasing Power Stability 

Sound money represents honesty in monetary exchange. Gold is considered trustworthy by its users because its value can’t be created. Investors turn to gold when they fear currency debasement, sovereign default, or uncontrolled debt expansion.  

Some view inflation as theft, and sound money, like gold or silver, combats inflation by serving as a store of value as the USD decreases in value. Since 1971, when the U.S. abandoned the gold standard, the dollar has lost over 85% of its purchasing power. Gold prices often rise during inflationary cycles, reflecting investors’ shift toward assets that preserve real value. 

Gold vs. Fiat Currencies 

Compared to gold, fiat currency is less trustworthy and has a shorter lifespan.  

Gold as Money 

Gold can’t be printed or inflated by central banks, which is why it’s at the heart of sound money principles. Gold products are currently being pushed through legislation to encourage anyone, regardless of wealth status, to use gold in barter, trade, or to invest.  

• Goldbacks: They are legally usable under U.S. law as a barter/currency alternative. There is a growing network of small businesses/merchants that voluntarily accept Goldbacks as payment.  

• Credit Cards: Those cards (like The Bullion Card and The Bullion Card: Gold Edition) earn gold and silver back on purchases. 

Sound Money Policies 

Implementing a transformation to a gold-centric currency in the United States would encounter enormous constitutional, legal, and institutional hurdles, as well as significant transition difficulties. Tasks such as revising existing contracts, restructuring the Federal Reserve, re-denominating public and private debt, and achieving national political agreement would be monumental undertakings. While some advocates continue to call for a return to a gold- or commodity-backed monetary system, no such measure has been enacted at the federal level.  

By late 2025, a growing number of U.S. states had debated or adopted partial “sound money” initiatives. Most of these involve exempting bullion from certain taxes or establishing state depositories, though relatively few extend to full legal tender recognition. For example:  

Alabama – April 14, 2025: Senate Bill 130 reaffirmed gold and silver as lawful money for voluntary transactions within the state. This marks Alabama’s third major sound money statute since 2018. The law becomes effective on October 1, 2025.  

Hartford, Connecticut – June 30, 2025: A new house bill eliminated the final remaining state-level tax on purchases of precious metal bullion—including gold, silver, platinum, and palladium.  

Texas – June 22, 2025: Governor Abbott signed HB 1056, authorizing gold and silver specie stamped with weight and purity to serve as legal tender. The act introduces a phased rollout, empowering the Comptroller to design the transactional framework within federal boundaries. Participation is voluntary, allowing businesses to opt in but not requiring them to accept it.  

Since the passage of Utah’s 2011 Legal Tender Act, other states have advanced similar “sound money” measures, ranging from sales tax exemptions on bullion to the creation of state depositories. However, comprehensive legal tender laws remain rare. Advocates frequently cite states such as Wyoming, South Dakota, Alaska, and Idaho as the most progressive in advancing these reforms. 

OneGold and Gold 

Before coins or paper bills, people bartered goods like grain, livestock, and shells. Today, OneGold is re-monetizing gold for the digital age by offering direct ownership of vaulted metal and, soon, an asset-backed debit card that allows customers to spend it. Although a nationwide gold-backed monetary system remains unlikely, state-level reforms and creative ways to use gold in common transactions show a renewed effort to reintegrate gold into commerce as both a hedge against inflation and a practical means of exchange.