Committee Hears Proposal to Recognize Gold and Silver as Legal Tender; Banks, Regulators Raise Practical Concerns

Representative Nathan Toman (District 34) introduced House Bill 1441 to the Senate Finance and Taxation Committee on the bill's intent to add gold and silver to the state's legal-tender definition and to exclude a U.S. central bank digital currency.

The measure would explicitly recognize specie — gold and silver — as legal tender in the state while including language that a person may not be required to offer or accept specie for payment of debts, deposits or other purposes. Representative Toman summarized the bill in the hearing by saying, “House Bill 14 41 is gold as legal tender.”

Proponents said the bill is intended to remove state-level friction for private use of precious metals and to clear tax and regulatory uncertainty that can discourage citizens from adopting gold-backed payment options. Representative Sue Ann Olson (District 8) told the committee she had used an app that allows purchase of gold and issuance of a debit card that spends a user’s gold holdings at the card network’s dollar conversion rate. Olson argued the measure could let North Dakota explore a state bank role in supporting gold-backed payments and said, “I have this app. So what how this works is that you buy gold with it and then they issue you a debit card and you can spend it like you can spend a MasterCard anywhere and it just leaves your account at whatever the daily price of gold is.”

JP Cortez, executive director of the Sound Money Defense League, said similar laws in other states are largely symbolic and do not compel private businesses to accept precious metals as payment. “This is almost entirely a symbolic as far as legal tender goes,” he said, adding that state-level steps can support federal change such as proposals to remove capital-gains treatment for day-to-day use of gold.

Banking and regulatory witnesses took neutral positions but flagged operational and consumer-protection issues. Rick Kleberg, president and CEO of the North Dakota Bankers Association, said amendments adopted on the House side that clarify banks and credit unions are not required to accept specie are important. He told the committee banks do not accept gold as deposits today and that privately issued gold-backed instruments raise questions about authentication and custody. Kleberg said Utah’s statute was used as model language to avoid creating liability where banks are not prepared to accept gold-in-kind.

Lisa Cruz, commissioner of the Department of Financial Institutions, testified in a neutral position and outlined several practical concerns that led the agency away from opposition. Cruz explained the department oversees banks, credit unions and nonbank financial companies and said the amended bill avoids creating a regulatory expectation that the department would authenticate gold holdings. She summarized federal legal context with a reference to 31 U.S.C. § 5103 and said states can include additional forms of legal tender in state law, but “the bill has been amended to be consistent with other states that have included gold as legal tender. It includes exemptions and makes it clear that the state does not force anyone or any business to accept legal tender.”

Witnesses and lawmakers asked practical questions about how “gold as legal tender” would work in commerce. Committee members asked whether gold-backed debit cards operate by collateralizing holdings or by selling gold on demand to fund dollar payments. Representative Toman and witnesses described typical models in which a custodian holds allocated gold and converts value to dollars when a merchant payment is made, similar to how some crypto-debit cards operate.

Testimony also addressed taxation. Supporters said state-level recognition and removal of state capital-gains friction on small transactions would encourage use; they noted federal tax treatment remains the controlling factor for capital-gains rules. JP Cortez said an existing federal bill, the Monetary Metals Neutrality Act, aims to remove capital-gains tax barriers at the federal level.

Committee members and witnesses raised consumer-protection questions: whether FDIC or federal deposit insurance would cover gold holdings (it does not), how private issuers would ensure authenticity and custody, and whether local banks have vault capacity to hold metals. Kleberg and Cruz both stressed that without federal standards or a mint-backed instrument, authentication and verification risks would fall to private vendors and could expose consumers.

No formal action or vote occurred. The committee closed the hearing on House Bill 1441 after witnesses finished and moved on to the next item on the agenda.

Ending: Committee members indicated the bill would be considered further in light of House amendments and ongoing conversations with stakeholders; no committee votes or directives were recorded in the transcript.