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]
Overview
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.
Front side of a single (one) New Hampshire edition Goldback
Back side of a single (one) New Hampshire edition Goldback
Value
There is a list price for the Goldbacks which can be found on their home page. The listed price can also be obtained as an Android App. The manufacturer of Goldback does not directly sell Goldbacks. The Goldbacks are sold to distributors, which then sell to the public. The listed price can fluctuate once a day on week days and has a high correlation to the price of gold in dollars. Though there is a listed price, the cost varies widely when purchasing them on the open market. There are thousands of business that have listed as accepting Goldbacks, but they are free to set the value of the Goldback at their store.
Reported use
A "We accept the Goldback" sticker on a point-of-sale machine in Utah
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]
Design
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 notes are intentionally designed to not be confused with U.S. dollars. The person on the note is always a woman, not a man as found on the U.S. dollars. The note is designed to be looked at vertically not horizontally. Also, there is no 20 Goldback note but rather a 25 Goldback.
The first series of Utah Goldbacks 2019
Local Legislation
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]
Criticism
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%.
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