Are Goldbacks Real Money?

Posted - October 17, 2023
are goldbacks real money

Are Goldbacks real money? Goldbacks are not a legal currency, but they can be used to pay for goods and services at select retailers. 

Collectors often have questions about Goldbacks, which are unique products that look a lot like golden bank notes. The first question we often get is a simple one: are Goldbacks real money?

A Goldback is an alternative currency made from real gold. Goldbacks are accepted at some business establishments in Utah, New Hampshire, Nevada, and Wyoming. Each Goldback contains 1/1000 oz of fine gold bullion. Converting between different denominations of this alternative currency is easy, considering that we know the gold content present in the lowest possible denomination. 

Are Goldbacks Actual Currency? 

Goldbacks are considered a local currency. This means that a Goldback is not legal tender, according to the federal government. Businesses aren’t under any obligation to accept your Goldbacks in exchange for goods and services. 

1 Nevada Goldback Gold Aurum Note
1 Nevada Goldback

Still, Goldbacks are accepted at a significant number of retail establishments in the states where they’ve been distributed. We’ll take a closer look at the question, “are Goldbacks real money?” in the next section. 

Where Are Goldbacks Legal Tender? 

Are Goldbacks real money in Utah? This is a common misconception. In reality, Goldbacks are not considered legal tender in any U.S. State. 

In 2011, Utah’s government passed the Utah Legal Tender Act. This allowed the state of Utah to make gold, silver, and other precious metals legal tender. The state did not, however, choose to adopt gold as legal tender via any actual law. 

This led to a bit of confusion. Are Goldbacks real money or not? In order to be ‘real money’ in the traditional sense, a currency needs to be considered legal tender by the government. A legal tender is a currency that is backed by the issuing government. Legal tender can be used to purchase goods and services, and a legal tender’s value is generally very stable because of its governmental support. 

How to Use Goldbacks 

Goldbacks are not actually legal tender. Does that mean they aren’t real money? Well, sort of. 

While Goldbacks are not real money, they can be used at certain businesses to buy goods and services. Some companies in Utah even have machines they use to count and authenticate the Goldbacks you use to make purchases! 

To use a Goldback, you’ll need to find a business that accepts them. Then, you’ll need to figure out the amount of gold in your Goldback note. Multiply the denomination (e.g. 50 Goldbacks) of your note by .001, and you’ll have the amount of gold in your Goldback (in ounces). 

Traders typically value Goldbacks based on the spot price value of the gold they contain. 

50 Nevada Goldback
50 Nevada Goldback

Goldbacks: An Alternative Currency 

Goldbacks aren’t a legal tender currency. Experts have another term for what Goldbacks are: The Goldback is an alternative currency. Some businesses in certain jurisdictions may accept them for payment, but they’re under no legal obligation to do so. 

Final Thoughts: Are Goldbacks Real Money? 

Are Goldbacks real money? Yes and no. Goldbacks are an alternative currency, which means that they are sometimes used to buy goods and services. But because the Goldback is not an official currency and remains privately minted, it’s not backed – or supported – by the federal or state governments of the United States. 

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About The Author

Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.