The Goldback is a family of

local currencies In economics, a local currency is a currency that can be spent in a particular geographical locality at participating organisations. A regional currency is a form of local currency encompassing a larger geographical area, while a community curren ...

operating in four

U.S. state In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its sover ...

s and launched by Goldback, Inc. in

Utah Utah ( , ) is a state in the Mountain West subregion of the Western United States. Utah is a landlocked U.S. state bordered to its east by Colorado, to its northeast by Wyoming, to its north by Idaho, to its south by Arizona, and to it ...

in 2019. Goldbacks contain a thin layer of gold within a polymer coating.

Overview

Goldbacks are shaped like regular currency notes but contain 24K pure gold. The gold is safely contained between two layers of clear polyester, which add artistic elements to the fractional gold bullion they contain. The term Goldback refers to each unit of the currency and is 1/1000 of an ounce of pure gold. The Goldbacks are issued in denominations of 1, 5, 10, 25, and 50, each containing proportionally larger amounts of gold. The notes are minted by Valaurum, a regulated and certified private mint which mints gold products for various governments across the world. Valaurum uses a proprietary and patented vacuum deposition process to fuse gold atomically together into thin sheets encased in a plastic film designed to hold the gold. Since the launch of the Goldback, the company also sells a leather wallet designed for Goldbacks. Initially funded by a lease of Gold from the United Precious Metals Association, with approximately US$1,000,000 in gold, demand has grown from $100k per month, to over a million USD per month in sales. More than US$20 million worth of Goldbacks have been manufactured and circulated, although an up-to-date market cap is not published. While it is sold as a local currency only in four regions, they have been purchased as a gold product, or for their collector's value, worldwide. The Utah goldback was launched in 2019, with series for

Nevada Nevada ( ; ) is a U.S. state, state in the Western United States, Western region of the United States. It is bordered by Oregon to the northwest, Idaho to the northeast, California to the west, Arizona to the southeast, and Utah to the east. N ...

New Hampshire New Hampshire is a U.S. state, state in the New England region of the northeastern United States. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Gulf of Maine to the east, and the Canadian province of Quebec t ...

, and

Wyoming Wyoming () is a U.S. state, state in the Mountain states, Mountain West subregion of the Western United States. It is bordered by Montana to the north and northwest, South Dakota and Nebraska to the east, Idaho to the west, Utah to the south ...

launching in 2020, 2021, and 2022, respectively. File:One Goldback Front (New Hampshire).jpg, Front side of a single (one) New Hampshire edition Goldback File:One Goldback Back (New Hampshire).jpg, Back side of a single (one) New Hampshire edition Goldback

Reported use

KSL 5 TV, the

NBC The National Broadcasting Company (NBC) is an Television in the United States, American English-language Commercial broadcasting, commercial television network, broadcast television and radio network. The flagship property of the NBC Enterta ...

affiliate of

Salt Lake City Salt Lake City (often shortened to Salt Lake and abbreviated as SLC) is the Capital (political), capital and List of cities and towns in Utah, most populous city of Utah, United States. It is the county seat, seat of Salt Lake County, Utah, Sal ...

, reported local businesses seeing a surge of people using Goldbacks in everyday transactions.

Reuters Reuters ( ) is a news agency owned by Thomson Reuters Corporation. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide. Reuters is one of the largest news agencies in the world. The agency was estab ...

has reported as of 2022 that as many as "a quarter to half of small businesses in Utah will accept the oldbacknotes". Meanwhile,

has seen some buyers purchasing Goldbacks as part of an

inflation hedge An inflation hedge is an investment intended to protect the investor against (hedge) a decrease in the purchasing power of money (inflation). There is no investment known to be a successful hedge in all inflationary environments, just as there is no ...

investment vehicle.

Design

Each Goldback features a feminine figure, symbolically representing a cardinal virtue. Which virtues are represented and how they are represented varies according to the state series and region it serves. While each series is different in design, they are all interchangeable and contain the same amount of gold. The size and shape of each bill can also tell part of the story of money. The 1GB is the same size and shape as some

Early American currency Early American currency went through several stages of development during the colonial and post-Revolutionary history of the United States. John Hull was authorized by the Massachusetts legislature to make the earliest coinage of the colony (the ...

, The 25GB note is identical in size to a

Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...

note, with the 50GB note the size of an old

Gold certificate Gold certificates were issued by the United States Treasury as a form of representative money from 1865 to 1933. While the United States observed a gold standard, the certificates offered a more convenient way to pay in gold than the use of coin ...

. The 5GB and 10GB notes are proportionally larger than the one and smaller than the 25. This enables most wallets to comfortably hold Goldbacks. The Utah series depicts the virtues of Liberty, Victory, Justice, Truth, and Prudence. The Nevada series depicts the virtues of Liberty, Fortitude, Justice, Wisdom, and Charity, while the New Hampshire series depicts the virtues of Liberty, Fortitude, Foresight, Truth, and Grace (or Gratitude). All three Series also feature animals and plants native to the states. First Utah Goldback series 1-50

Legal Status

The Legal status of the Goldback varies from state to state, as local currencies are not addressed by federal law. The creation of the Utah Goldback was inspired by the Passage of the

Utah Legal Tender Act The Utah Legal Tender Act, passed March 10, 2011, recognizes gold and silver coins issued by the United States as legal tender in the state of Utah. This includes allowing the state of Utah to pay off debts in gold and silver and allowing individu ...

which provides for the adoption of gold and silver as legal tender by the state. The Utah Goldback has not been formally adopted by the state government and is privately issued, but the proponents of the currency claim that as a form of gold bullion produced by a recognized and regulated private mint it falls under the legal tender provisions of the act. This seems to have been affirmed by the Utah Legislature on March 25, 2022. The

Utah State Legislature The Utah State Legislature is the state legislature of the U.S. state of Utah. It is a bicameral body, comprising the Utah House of Representatives, with 75 state representatives, and the Utah Senate, with 29 state senators. There are no term li ...

expanded on the definition of legalized gold for legal tender—explicitly making gold with a "polymer holder" or "coating" is not subject to the state sales tax—specifically any metal that, "...has a gold, silver, or platinum metallic content of 50% or more, exclusive of any transparent polymer holder, coating, or encasement..." Future legislation or litigation may be necessary to establish the legal limits of Goldback as state legal tender. The Goldback also serves as a note or bill for redemption in U.S. Minted Legal tender Gold coins at the vaults of the United Precious Metals Association, and is therefore backed by Legal Tender money under state and federal law, regardless of its independent status as gold money. The first Goldbacks were made for Utah, partly as a result of the legalization of gold and silver as legal tender in Utah in 2011 as part of the

, and partly because the founder and first employees were based out of Utah, which has a strong culture of precious metals collecting and appreciation. File:'For Circulation in New Hampshire' text on a Goldback (NH version).jpg, "For Circulation in New Hampshire" text found on a common Goldback in the "One" denomination File:'Voluntary Negotiable Instrument' text on a Goldback (NH version).jpg, "Voluntary Negotiable Instrument" text found on a common Goldback in the "One" denomination File:'Privately Issued, Not U.S. Dollar Legal Tender. US & International Patents Pending' text on a Goldback (NH version).jpg, "Privately Issued, Not U.S. Dollar Legal Tender. US & International Patents Pending" text found on a common Goldback in the "One" denomination File:Patent language detail on a Goldback.jpg, "U.S. Patent 10781520. Privately Issued. Not US Dollar Legal Tender" detail from a 2022 Utah 50 Goldback note File:Specie Legal Tender Instrument Language on a Goldback.jpg, Specie Legal Tender Instrument File:Bearer note language on a Goldback.jpg, "Exchangeable by Goldback Inc. in U.S. Gold Coin to Bearer on Demand" In contrast to prior concepts and attempts at achieving a gold or silver common

medium of exchange In economics, a medium of exchange is any item that is widely acceptable in exchange for goods and services. In modern economies, the most commonly used medium of exchange is currency. The origin of "mediums of exchange" in human societies is ass ...

, such as the Liberty dollar, the Goldback considered the possibility of legal issues from its inception. With this in mind, the company behind the Goldback built-in features to ensure that Goldbacks cannot be confused with government issued legal tender, such as the

United States dollar The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...

. One effort the company also took in order to avoid issues with Federal counterfeit laws or being perceived as a threat to dollar hegemony was to print terms on each Goldback such as, "Voluntary negotiable instrument" and "For circulation in Utah", "For circulation in New Hampshire", or "For circulation" specific to whichever state the particular Goldback in question was 'printed' for. Also, the text "Privately Issued, Not U.S. Dollar Legal Tender. US & International Patents Pending" appears on each Goldback (of all denominations and states of issue). The makers of the Goldback contract with another firm, Oregon-based Valaurum, to manufacture the Goldback. Valaurum says of the above concern:

Criticism

Some commentators have stated that one potential downside of the Goldback is the premium that each Goldback costs over the

Spot price In finance, a spot contract, spot transaction, or simply spot, is a contract of buying or selling a commodity, security or currency for immediate settlement (payment and delivery) on the spot date, which is normally two business days after the ...

of gold embedded within each note.

References