Ohio legislators propose state currency backed by silver and gold

COLUMBUS, Ohio (WCMH) -- Ohioans could soon buy their groceries or morning coffee with silver and gold instead of the American dollar.

House Bill 206, introduced by Reps. Jennifer Gross (R-West Chester) and Riordan McClain (R-Ashland), would establish a state currency based on gold and silver. The bill directs the state treasurer to set up a transactional currency rooted in silver and gold to address concerns with the value of the U.S. dollar.

"You no longer need to be rich to own gold, you can spend gold and silver anywhere that accepts Mastercard," Gross said.

The U.S. Constitution said only the federal government can coin money and regulate its value, so states are generally not allowed to make their own currency. The Constitution does allow one exception, as it says, "no state shall ... make anything but gold and silver coin a tender in payment of debts."

Utah was the first state to take advantage of this exception, codifying its own gold tender law in 2011. If passed, H.B. 206 would make Ohio the 12th state to recognize its own gold and silver currency. The bill would also remove taxes associated with silver and gold purchases, making it easier to pay without the dollar.

Concerns with the system have included the fluctuating price of gold, the fact that gold investments are taxed federally, and the logistics in acquiring and keeping gold reserves.

If passed, the bill would allow Ohioans to purchase gold and silver through the state and use their gold and silver to make purchases instead of American currency. The system would be electronic, and every dollar spent would be represented by physical gold and silver held by the state in a protected reserve.

Spending silver and gold would look similar to using a credit card or Apple Pay. Ohioans using the system would have to purchase silver and gold through the state and pay a fee to be authorized to spend that money.

"If there's one asset that's really stood the test of time, it's gold," McClain said. "It's silver to some degree."

McClain said the bill emerged from concerns about the American dollar. The dollar used to be backed by gold, where every dollar had an attached gold value held in a U.S. reserve. In 1971, the U.S. removed the gold standard, and McClain said that made the dollar a lot less protected.

"The U.S. dollar is what's called a fiat currency, and all that means is that the only thing that's backing the dollar is the perception of the U.S. economy or the federal government or the U.S. reserve," McClain said. "There's nothing actually backing the dollar."

McClain said the dollar has lost a lot of purchasing power over the past 100 years, where gold and silver have increased in value. According to the Federal Reserve Bank of Minneapolis, $1 in 1925 has the purchasing power of $18.37 today. Comparably, the National Mining Association valued one ounce of gold at $379.16 in 1925, using 2025 dollar values. One ounce of gold is valued at $2,394.86 today.

McClain said offering a simpler way to make purchases with silver and gold will help Ohioans, especially those with similar concerns to his own. He said he is concerned by the dollar's devaluation, and by the federal government's printing of more money regardless of increasing debt.

He is also troubled by the switch toward gold- and silver-backed currencies on the global stage. According to J.P. Morgan, countries like China, Russia and Turkey have been heavily investing in gold in recent years, indicating a shift away from the American dollar, which used to be more standard in international business.

"We've seen a number of our foreign adversaries move in the way of gold, and in my opinion that is intentionally targeting the U.S.," McClain said.

The new currency would only work in the state of Ohio. McClain said he hopes the federal government will make similar adjustments to protect Americans' purchasing power, but he can only offer statewide solutions. Although he is advocating for national change, he said he did not anticipate any significant federal reforms anytime soon.

H.B. 206 is in House Financial Institutions Committee, and had its first hearing on Oct. 15. A second hearing is not yet scheduled.