 Goldback logo used as of 2023 | |
| Issuance | |
|---|---|
| Issuing authority | Goldback, inc. |
| Website | goldback |
| Mint | Valaurum |
| Website | valaurum |
The Goldback is a family of gold commodities advertized as a local currency in five U.S. states and sold and marketed by Goldback, Inc. in Utah in 2019. Goldbacks contain a thin layer of gold within a polymer coating equivalent to 1/1000th of an ounce. [1]
Goldbacks are shaped like regular currency notes but contain 24K gold. The gold is 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.[ citation needed ] The Goldbacks are sold in "denominations" of 1, 5, 10, 25, and 50, each containing proportionally larger amounts of gold. [2] [3] [4] The notes are minted by Valaurum, a private mint. Valaurum uses a vacuum deposition process to fuse gold together into thin sheets encased in a plastic film designed to hold the gold. [2] [5] More than US$20 million worth of Goldbacks have been manufactured and circulated[ clarification needed ], although an up-to-date market cap is not published. While it is sold as a "local currency" (see below) only in five regions, they have been more broadly purchased as a gold product or for their collector's value.
The Utah goldback was released in 2019, with series for Nevada, New Hampshire, Wyoming, and South Dakota launched in 2020, 2021, 2022, and 2023 respectively. [6]
KSL 5 TV, the NBC affiliate of Salt Lake City, reported a small number of local businesses accepting using Goldbacks for everyday transactions. [4]
In association with members of the libertarian Free State Project in New Hampshire, widespread use has been reported of people spending Goldbacks on various goods and services within the state. [7] [ verification needed ]
Each Goldback features a figure, symbolically representing a cardinal virtue. While each series is different in design, they are all interchangeable and contain the same amount of gold. [8]
The Utah series depicts the virtues of Liberty, Victory, Justice, Truth, and Prudence. [8] [2] 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). The Wyoming series depicts Liberty, Loyalty, Trust, Boldness, and Reverence. The South Dakota series features Liberty, Honor, Harmony, Industry, and Peace. All five Series also feature animals and plants native to the states.[ excessive detail? ]
The Goldback has not been adopted by any state government and is privately issued.
In Utah, the Utah State Legislature expanded the definition of 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..." [9] 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 Utah Legal Tender Act, and partly because the founder and first employees were based out of Utah. [10]
In order to avoid issues with Federal counterfeit laws, each Goldback is printed with statements such as, "Voluntary negotiable instrument" "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. [6]
Some commentators have stated that one potential downside of the Goldback is the premium that each Goldback costs over the spot price of gold embedded within each note. [11] Currently the premium to the gold price is around 100%.
A currency is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a system of money in common use within a specific environment over time, especially for people in a nation state. Under this definition, the British Pound sterling (£), euros (€), Japanese yen (¥), and U.S. dollars (US$) are examples of (government-issued) fiat currencies. Currencies may act as stores of value and be traded between nations in foreign exchange markets, which determine the relative values of the different currencies. Currencies in this sense are either chosen by users or decreed by governments, and each type has limited boundaries of acceptance; i.e., legal tender laws may require a particular unit of account for payments to government agencies.
The standard circulating coinage of the United Kingdom, British Crown Dependencies and British Overseas Territories is denominated in pennies and pounds sterling, and ranges in value from one penny sterling to two pounds. Since decimalisation, on 15 February 1971, the pound has been divided into 100 pence. Before decimalisation, twelve pence made a shilling, and twenty shillings made a pound.
Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves as well as their value in buying goods. This is in contrast to representative money, which has no intrinsic value but represents something of value such as gold or silver, for which it can be exchanged, and fiat money, which derives its value from having been established as money by government regulation.
The Gold Standard Act was an Act of the United States Congress, signed by President William McKinley and effective on March 14, 1900, defining the United States dollar by gold weight and requiring the United States Treasury to redeem, on demand and in gold coin only, paper currency the Act specified.
Seigniorage, also spelled seignorage or seigneurage, is the difference between the value of money and the cost to produce and distribute it. The term can be applied in two ways:
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Precious metals are rare, naturally occurring metallic chemical elements of high economic value. Precious metals, particularly the noble metals, are more corrosion resistant and less chemically reactive than most elements. They are usually ductile and have a high lustre. Historically, precious metals were important as currency but are now regarded mainly as investment and industrial raw materials. Gold, silver, platinum, and palladium each have an ISO 4217 currency code.
A United States Note, also known as a Legal Tender Note, is a type of paper money that was issued from 1862 to 1971 in the United States. Having been current for 109 years, they were issued for longer than any other form of U.S. paper money other than the currently issued Federal Reserve Note. They were known popularly as "greenbacks", a name inherited from the earlier greenbacks, the Demand Notes, that they replaced in 1862. Often termed Legal Tender Notes, they were named United States Notes by the First Legal Tender Act, which authorized them as a form of fiat currency. During the early 1860s the so-called second obligation on the reverse of the notes stated:
This Note is a Legal Tender for all debts public and private except Duties on Imports and Interest on the Public Debt; and is receivable in payment of all loans made to the United States.
The Philippine peso, also referred to by its Filipino name piso, is the official currency of the Philippines. It is subdivided into 100 sentimo, also called centavos.
Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in payment of a debt extinguishes the debt. There is no obligation on the creditor to accept the tendered payment, but the act of tendering the payment in legal tender discharges the debt.
The pound sterling is the official currency of the United Kingdom, Jersey, Guernsey, the Isle of Man, British Antarctic Territory, South Georgia and the South Sandwich Islands, and Tristan da Cunha.
The Singapore dollar is the official currency of the Republic of Singapore. It is divided into 100 cents. It is normally abbreviated with the dollar sign $, or S$ to distinguish it from other dollar-denominated currencies. The Monetary Authority of Singapore (MAS) issues the banknotes and coins of the Singapore dollar.
The American Liberty Dollar (ALD) was a private currency produced in the United States.
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International finance is the branch of financial economics broadly concerned with monetary and macroeconomic interrelations between two or more countries. International finance examines the dynamics of the global financial system, international monetary systems, balance of payments, exchange rates, foreign direct investment, and how these topics relate to international trade.
The history of the United States dollar began with moves by the Founding Fathers of the United States of America to establish a national currency based on the Spanish silver dollar, which had been in use in the North American colonies of the Kingdom of Great Britain for over 100 years prior to the United States Declaration of Independence. The new Congress's Coinage Act of 1792 established the United States dollar as the country's standard unit of money, creating the United States Mint tasked with producing and circulating coinage. Initially defined under a bimetallic standard in terms of a fixed quantity of silver or gold, it formally adopted the gold standard in 1900, and finally eliminated all links to gold in 1971.
Silver may be used as an investment like other precious metals. It has been regarded as a form of money and store of value for more than 4,000 years, although it lost its role as legal tender in developed countries when the use of the silver standard came to an end in 1935. Some countries mint bullion and collector coins, however, such as the American Silver Eagle with nominal face values. In 2009, the main demand for silver was for: industrial applications (40%), jewellery, bullion coins and exchange-traded products. In 2011, the global silver reserves amounted to 530,000 tonnes.
The Kelantanese dinar is a currency issued by the Government of the Malaysian state of Kelantan, which purportedly is in conformance with the concept of the Islamic gold dinar. The Kelantanese dinar is available in the form of coins of several denominations. These coins were first struck in 2006 by Mariwasa Kraftangan of Kuala Kangsar, Perak, a local producer of souvenirs and replicas of objects of art and culture, and launched by the state of Kelantan on 20 September 2006. The Government of Kelantan had suggested that the coins had the status of legal tender, and the state-issued dinar sold out quickly, with many buyers seeing the gold dinar as a better choice than fiat money.
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment.
Fiat money is a type of currency that is not backed by a precious metal, such as gold or silver, or backed by any other tangible asset or commodity. Fiat currency is typically designated by the issuing government to be legal tender, and is authorized by government regulation. Since the end of the Bretton Woods system in 1971, the major currencies in the world are fiat money.