In a historic decision, Florida Governor Ron DeSantis has officially authorized the use of gold and silver as legal tender, making the Sunshine State the first major player in the United States to do so. This significant landmark in the American monetary policy was signed into law on May 27th, with its implications set to influence both the regional and national economic climate.
A Move to Counteract Dollar Depreciation
According to DeSantis, the primary aim of the legislation is to safeguard the financial autonomy of Floridians. In the face of the dwindling value of the US dollar, this innovative measure offers Floridians an alternative financial strategy. The law also authorizes payment providers and monetary service institutions like Paypal to offer gold and silver remittance services.
“This effectively means that these precious metals will begin to assume their true role as a currency, instead of remaining merely an investment tool for the wealthy,” DeSantis explained. As per the law, gold coins with a purity of 99.5% and silver coins with a purity of 99.9% will be granted legal tender status in Florida.
Legal Framework and Tax Exemptions
This groundbreaking legislation lays an essential legal groundwork for acknowledging the legal tender position of gold and silver in Florida. Notably, it grants tax exemptions for transactions involving gold and silver that meet the purity or sales volume criteria. It also stipulates regulation for custodians of gold and silver, and allows these precious metals to be used in transactions.
However, the finer details and implementation rules of the law remain dependent on legislative approval. This law makes Florida the front-runner among larger states, with only two smaller states having previously enacted similar laws.
Gold as a Preferred Investment Option
Gold’s price surge in recent times indicates that investors are seeking protection against the uncertainties of the US economy. The international price of gold has consistently reached new highs this year, even surpassing $3500 per ounce last month.
A recent report by Goldman Sachs, cited by Forbes, advises hedging the risk of a USD collapse with gold rather than Bitcoin. Goldman Sachs predicts that the trend of central banks globally buying gold will continue for at least another two years. They assert that the demand from central banks alone could drive the price of gold to $4000 per ounce.
“Bitcoin is more volatile and is more likely to be influenced by extraction operations. Also, its positive correlation with the performance of tech stocks is higher,” said Daan Struyven, one of the heads of Goldman Sachs Global Commodity Research. For investors looking to mitigate the downward risk of US tech stocks, gold is a more suitable choice.
As bonds and other traditional investments continue to face uncertainty, Florida’s move to legitimize gold and silver as legal tender signifies a significant shift in investment portfolios. This diversification strategy not only offers Floridians financial freedom but may also set a precedent for other states contemplating similar measures.
