The History of Goldbacks

As inflation continues to weaken the US dollar, investors across the country are seeking alternative currencies and investments that might retain the value of their wealth. Naturally, gold coins, rounds, and bars are popular vehicles for these kinds of moves.

Another investment that has become increasingly favored for this aim are Goldbacks. This alternative currency harkens back to the days of the gold standard, where the value of the dollar was inextricably tied to an amount of gold.

It’s important to understand how Goldbacks fit into the landscape of American currency. So, this page is a retrospective on the timeline that led us to Goldbacks, along with a deeper look at the successes that Goldbacks have experienced in their relatively brief lifetimes.

A brief history of the gold standard

Early America

Make no mistake – Americans used gold and silver interchangeably from the country’s inception. The Coinage Act of 1792 established both the value relationship between gold and silver and how much gold would be part of each coin denomination minted by the US Mint, which the act also created.

The first 100 years of the country’s history undoubtedly bore witness to the intertwining of the dollar, gold, and silver. However, there was an uneasy tension between those who favored gold and those who preferred silver.

This tension eventually bubbled over during the 1896 presidential election. The Democrats essentially became a single-issue party in favor of silver, as they saw it as the choice of the common man and rural constituent. Their nominee, William Jennings Bryan, cemented his place in history with his Cross of Gold speech, an impassioned argument on behalf of the white metal.

However, the majority of Americans proved to throw their support behind gold as they elected William McKinley to the presidency instead of Bryan. McKinley oversaw a massive increase to the gold stores of the country and moved the country toward the yellow metal.

The 20th Century

The US officially adopted the gold standard in 1900 when McKinley signed the Gold Standard Act. The act redefined the relationship between gold and the dollar and mandated that dollars could be exchanged at the Federal Reserve for the equivalent amount of gold.

The gold standard existed without demonstrable setbacks until 1933. By that point, the country was four years into the Great Depression, and President Franklin D. Roosevelt’s plan to pull the country out of the down economy involved massive amounts of government spending.

The gold standard was an impediment to those plans, as he needed to unlock the dollar and increase the money supply to pay for his New Deal. So, he issued Executive Order 6102, which criminalized private ownership of gold in significant amounts. Citizens were directed to surrender their stores of gold to the Federal Reserve for exchange into dollars, and the government became the largest holder of the yellow metal in the country.

The exchange rate designated in the EO – $35 per ounce – became the basis rate for the Bretton Woods Agreement. The BWA required signatory countries to pin their currencies within 1% of the dollar. In doing so, countries could exchange dollars for gold bullion at the $35 rate.

The Bretton Woods Agreement remained a fundamental element of US monetary policy until 1971. Then-President Nixon chafed under the arrangement because it was quite inflationary. Thus, he finally ended the gold standard and allowed the dollar to derive its value from its relationship to other currencies – a system known as the floating exchange rate.

Ironically, Nixon’s move opened the dollar to inflate at an almost unbridled pace. Since there was no longer any underlying tangible value to the dollar, its value became a matter of opinion.

Nixon’s successor, Gerald Ford, restored the right to own gold back to the citizenry in 1974. The Treasury began offloading its massive stores of gold to investors.

Thus, gold settled into its current status as a preserver of net worth and hedge against inflation. These two elements led to the inception of Goldbacks 37 years later.

The Story of Goldbacks (2011 – present)

The impetus for Goldbacks began, of all places, in Utah. The Beehive State passed the Specie Legal Tender Act, which legalized specie tender – gold and silver coins or bullion – as voluntary legal tender within the state borders.

In other words, it became possible to use actual gold to pay for goods or services so long as the dealer or merchant agreed to do so. Each individual store owner could agree to accept precious metals in exchange or not, but it is entirely up to them.

Eventually, a company – fittingly in Utah – devised a vehicle to take advantage of the law and make gold accessible to a greater swath of people. The company created Goldbacks in 2019. Each Goldback features 1/1000th of an ounce of 24-karat gold encased in a polymer shell.

Goldbacks soon became a minor favorite for Utahns to use in trade. Although large companies in Utah are less likely to accept them as currency, many small business owners have agreed to allow the passage of Goldbacks as legal tender in the years since their introduction.

Bear in mind, though, that the value of a Goldback is not fixed. Because their entire worth is derived from the price of gold, their value is 1/1000th of whatever the spot price is.

At this point, five other states have moved forward to designate Goldbacks as similar voluntary currencies. They are Florida, Nevada, New Hampshire, South Dakota, and Wyoming.

There are also six states that have legalized gold and silver as valid exchange instruments. However, they have not moved forward with designating Goldbacks specifically as legal vehicles for transfer.

Goldbacks continue to rise in popularity. In 2023, the value of Goldbacks made surpassed $100 million, and they haven’t slowed down. The most recent addition is Florida, which welcomed its own Goldback in 2025.

Despite the positive signs, Goldbacks remain both an alternative and niche product. What lies ahead for Goldbacks is unclear, but it’s unlikely that they are going away anytime soon.

If you want to give Goldbacks a shot, we can help you get started today!