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BLOG 6 |
Cluster 3: Legal and Constitutional Authority | All audiences | transactionalgold.com |
A plain-language guide to the constitutional foundation, state legislation, and legal status of Transactional Gold and Silver.
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Transactional Gold and Silver allows ordinary Americans to own real gold and silver — held in a secure vault in their name — and spend it anywhere using a debit card, while merchants receive U.S. dollars. It is Just Another Way to Pay; it does not replace the dollar; it is not cryptocurrency; it is not a digital currency (CBDC) and it’s your choice to use it. |
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Direct answer Yes. Transactional Gold and Silver is legal. Its constitutional foundation is Article I, Section 10 of the U.S. Constitution, which states that no state shall make anything but gold and silver coin a tender in payment of debts. Five governors have signed TGS legislation into law — Ron DeSantis in Florida, Greg Abbott in Texas, Sarah Huckabee Sanders in Arkansas, Jeff Landry in Louisiana, and Mike Kehoe in Missouri — demonstrating that TGS is not a theoretical concept but an enacted legal framework operating in multiple states today. Plain-English summary: The U.S. Constitution was written with gold and silver as money. Article I, Section 10 specifically protects the right of states to use gold and silver coin as legal tender. TGS takes that constitutional right and gives it a practical payment infrastructure — a debit card, a secure vault, and a modern payment network. It is not a loophole. It is not a workaround. It is the Constitution working exactly as the Founders wrote it. |
Yes. Transactional Gold and Silver is legal, constitutionally grounded, and already enacted into law in multiple U.S. states. The legal foundation for TGS was written into the U.S. Constitution in 1787 and has never been repealed. Five governors have signed TGS legislation into law. The Texas Bullion Depository, which provides the operational model for TGS infrastructure, has been operating since 2018 under Texas Government Code Chapter 2116.
The legality of TGS rests on three separate pillars: the constitutional text of Article I, Section 10; the body of Supreme Court precedent interpreting that text; and the enacted state legislation in Arkansas, Florida, Texas, Louisiana, and Missouri. Each pillar independently supports the legal status of TGS. Together they create a legal foundation that is difficult to challenge.
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Feature → How it works → Outcome Feature: TGS is built on Article I, Section 10 of the U.S. Constitution, which explicitly states that no state shall make anything but gold and silver coin a tender in payment of debts. How it works: States pass TGS legislation that establishes a legal framework for citizens to hold allocated gold and silver in a state-authorized depository and spend it through standard payment infrastructure. The legislation codifies the constitutional right into a practical operational system — defining custody standards, payment system requirements, tax treatment, and consumer protections. Outcome: Citizens in TGS-enabling states gain the legal right to use gold and silver as money — not as a constitutional theory, but as a practical option available through a debit card and a state-authorized depository account. |
Article I, Section 10, Clause 1 of the U.S. Constitution reads, in the relevant part: "No State shall...make any Thing but gold and silver Coin a Tender in Payment of Debts."
This clause has two important implications for TGS. First, it establishes gold and silver as the constitutional standard for money at the state level — the Founders wrote gold and silver into the foundational document of American law as the recognized form of legal tender. Second, while the clause restricts what states can declare as mandatory legal tender, courts and legal scholars have consistently interpreted it as permitting states to recognize gold and silver as lawful legal tender that citizens may voluntarily use. The constitutional text does not prohibit TGS — it provides its foundation.
The U.S. Supreme Court has affirmed the monetary role of gold and silver under this clause in multiple rulings. In Gwin v. Breedlove (1844), the Court held that a creditor was entitled to demand payment in gold or silver based on this clause. The constitutional history of money in America is a history of gold and silver — TGS restores access to that history through modern payment infrastructure.
Five governors have signed TGS legislation into law as of July 2026. Each signing is a legal act — an executive approval of a bill that passed both chambers of the state legislature — confirming that TGS is not a fringe proposal but an enacted legal framework with bipartisan legislative support across multiple states.
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State |
Bill signed |
Governor |
What it does |
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Arkansas |
HB 1918 — signed April 17, 2025 |
Gov. Sarah Huckabee Sanders |
Expanded existing legal tender law to add transactional framework — requires Chief Fiscal Officer to contract with a bullion depository and authorize a precious metals-backed electronic payment system. Passed House 89-1, Senate 33-0. |
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Florida |
HB 999 — signed May 27, 2025 |
Gov. Ron DeSantis |
Recognized gold and silver as legal tender, authorized money services businesses to transmit and accept payment in precious metals, eliminated sales tax on qualifying coins. Passed House 113-0, Senate 38-0. |
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Texas |
HB 483 — signed June 12, 2015 |
Gov. Greg Abbott |
Established the Texas Bullion Depository — the nation's first state-administered precious metals depository, operating since 2018 as a public/private partnership with over $400M in deposits as of June 2025. |
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Louisiana |
Signed 2025 |
Gov. Jeff Landry |
Enacted TGS framework as part of Louisiana's sound money legislation expanding precious metals legal tender recognition and depository access for state residents. |
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Missouri |
Signed 2025 |
Gov. Mike Kehoe |
Enacted TGS framework recognizing gold and silver as legal tender and authorizing electronic payment systems for transactional precious metals use. |
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Utah |
Passed by Utah legislature in June 2026, but not signed by the governor. |
Gov. Spencer Cox |
In the 2026 session, legislators enacted the TGS framework which allows state employees to elect to be paid in gold and silver. This is an incremental approach, but sets the stage for expansion of the use of transactional gold and silver in other financial transactions. |
Utah enacted earlier sound money legislation in 2011, becoming the first state in modern U.S. history to recognize gold and silver coins as legal tender. While Utah's most recent transactional framework bill was vetoed in 2025, the state's foundational legal tender recognition remains in place and continues to serve as a model for other states. In the 2026 legislative session, they passed the bill with the TGS framework which allows state employees to elect to be paid in gold and silver. This is an incremental approach, but sets the stage for expansion of the use of transactional gold and silver in other financial
This is one of the most common legal questions about TGS — and the short answer is no, not in the way most people assume.
Federal law, including the Legal Tender Act and subsequent statutes, establishes U.S. dollars as legal tender for all debts, public and private. This means creditors cannot be required to accept non-dollar payment against their will. However, nothing in federal law prohibits parties from voluntarily agreeing to transact in gold and silver. The Federal Reserve Act does not prohibit citizens from owning gold and silver or from using it in voluntary transactions. TGS bills are specifically designed around voluntary participation — no merchant, creditor, or individual is required to accept gold or silver. The voluntary framework is what makes TGS legally consistent with federal law.
Furthermore, Article I, Section 10 applies specifically to the states and their relationship to legal tender — not to voluntary private transactions. Courts have consistently held that parties may contractually agree to payment in gold or silver. TGS creates the state-level legal infrastructure that makes those voluntary transactions practical and regulated.
This is an important legal question and one that every TGS bill has addressed directly at the state level. Every enacted TGS law includes provisions exempting qualifying gold and silver transactions from state and local taxation — treating them as currency transactions rather than taxable commodity sales.
At the federal level, the tax treatment is more complex. The IRS currently treats gold and silver as property rather than currency for federal tax purposes, meaning that a gain in the dollar value of gold since purchase could theoretically be treated as a capital gain event when the gold is spent. This is an active area of policy advocacy — and one of the primary reasons TGS advocates support federal sound money legislation that would clarify the tax treatment of gold and silver when used as money rather than as an investment. Account holders should consult a qualified tax professional for advice specific to their circumstances.
State-level TGS bills address state and local tax treatment. Federal tax treatment remains the next legislative frontier for the TGS movement nationally.
For a working family in Arkansas, Florida, Texas, Louisiana, Missouri, and Utah, TGS is not a theoretical right — it is an enacted legal option. The state legislation that authorizes TGS in those states has been passed by elected legislators, signed by elected governors, and is now part of state law. Opening a TGS account in those states is a legally protected activity, the same as opening a bank account or purchasing any other financial product regulated by the state.
The constitutional foundation means that TGS cannot simply be prohibited by a later state law without overturning the constitutional text of Article I, Section 10. That foundation is more durable than a policy preference or a regulatory guidance — it is written into the supreme law of the land. Citizens who participate in TGS are not engaging in a gray area or a workaround. They are exercising a right that the Founders explicitly included in the Constitution and that five governors have now endorsed by signing TGS legislation into law.
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Common misunderstanding Transactional Gold and Silver operates in a legal gray area because the U.S. dollar is the official legal tender, and using gold and silver as money might conflict with federal currency law. |
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The reality TGS is not a legal gray area — it is a constitutionally grounded legal framework enacted by six state legislatures and signed by five governors. Federal legal tender law requires creditors to accept dollars — it does not prohibit parties from voluntarily transacting in gold and silver. TGS is designed around voluntary participation at every level. No merchant is required to accept it. No citizen is required to use it. The constitutional basis in Article I, Section 10 has never been repealed, and U.S. Supreme Court precedent has affirmed the monetary role of gold and silver under that clause. TGS is the law in five states. It is not a theory. |
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Citations — required for publication Article I, Section 10, Clause 1 — U.S. Constitution | constitution.congress.gov/browse/article-1/section-10/clause-1/ Gwin v. Breedlove, 43 U.S. (2 How.) 29 (1844) — Supreme Court precedent on gold and silver legal tender Texas Government Code Chapter 2116 — Texas Bullion Depository | statutes.capitol.texas.gov/Docs/GV/htm/GV.2116.htm Texas Bullion Depository — official state site | texasbulliondepository.gov Florida HB 999 — signed by Governor Ron DeSantis, May 27, 2025 | flsenate.gov Arkansas HB 1918 — signed by Governor Sarah Huckabee Sanders, April 17, 2025 | arkleg.state.ar.us GlintPay — commercial proof that gold-linked debit card payments work at scale | glintpay.com |
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Related questions — with direct 2-sentence answers Is it legal to pay taxes with gold and silver under TGS? In states with enacted TGS legislation, qualifying gold and silver may be accepted for payment of state and local taxes when the state or local government agrees to accept it — the acceptance is voluntary on both sides. So far, no state has agreed to accept physical gold or silver to pay taxes. If an account holder pays with a debit card, the states receive dollars so there is no distinction for the state. → Transactional Gold and Silver FAQ — /faq/ Can the federal government shut down a state TGS program? Federal authority over currency and monetary policy is broad, but Article I, Section 10 specifically addresses the relationship between states and legal tender in a way that courts have consistently interpreted as permitting voluntary gold and silver transactions. No enacted TGS legislation has been successfully challenged in federal court, and the voluntary nature of TGS programs is specifically designed to avoid conflict with federal legal tender requirements. → Is Transactional Gold and Silver a government mandate? — /blog/is-transactional-gold-a-government-mandate/ Do I owe federal capital gains tax when I spend gold through TGS? The IRS currently treats gold and silver as property for federal tax purposes, meaning a gain in value since purchase could potentially be a taxable event when spent. This is an active area of legislative advocacy at the federal level. State-enacted TGS laws address state and local tax treatment — federal tax treatment remains a separate question. Consult a qualified tax professional for advice specific to your situation. → What are the tax implications of Transactional Gold and Silver? — /blog/tax-implications-transactional-gold-and-silver/ How long has gold and silver been recognized as legal tender in the United States? Gold and silver have been recognized as legal tender in the United States since the Constitution was ratified in 1788. Article I, Section 10 wrote gold and silver into the foundational legal document of American government as the recognized standard for state-level legal tender. The modern TGS movement is a restoration of that constitutional standard through contemporary payment infrastructure. → What is the history of gold and silver as everyday money in America? — /blog/history-of-gold-and-silver-as-money-in-america/ Is TGS legal in states that have not yet passed legislation? In states without enacted TGS legislation, the constitutional foundation in Article I, Section 10 still exists, but there is no state-level legal framework for the depository, payment system, or tax treatment that makes TGS practically accessible. Voluntary gold and silver transactions between private parties remain legal in all states — the TGS legislation creates the practical infrastructure and consumer protections that turn a constitutional right into an everyday option. In reality, a person in any state could open an account with a payment processor that has passed the legislation meaning they can own and use transactional gold even though their gold may not be stored in their home state. → What states have signed Transactional Gold and Silver legislation? — /blog/what-states-have-signed-tgs-legislation/ |
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Read the full Transactional Gold and Silver FAQ transactionalgold.com/faq |