Reviving the Gold Standard: A History of Utah Goldbacks
Goldbacks are a family of alternative currencies based out of Utah. In four short years, the company behind them has transitioned from a small operation with tens of thousands of customers across dozens of states.
How did this strange golden currency become one of the most popular gold products in the United States? The story of Goldbacks doesn’t start with Goldback, Inc. Instead, our journey to discover the origins of these gold bullion notes starts with a monumental change to U.S. fiscal policy way back in 1971.
Today, we’re taking a look at the history of Utah Goldbacks, as well as some key details that every Goldback investor needs to know.
What is an Alternative Currency?
Alternative currencies are monetary units not used by the predominant government of a region. In the United States, the only real legal tender is the United States Dollar. This doesn’t stop some regions from using their own currencies.
Take the BerkShare as an example. BerkShares are a community currency used in The Berkshires, a region in Massachusetts. BerkShares are pegged to the United States Dollar but are purchasable for $.95 per unit. Each note features a different image of a famous person from the region, and the project seeks to support the local economy in the Berkshires.
But most local currencies run into an important problem: establishing value. For BerkShares, the operation’s success depends on the public’s willingness to accept that this new currency is worth the same as the classic USD.
This isn’t the case with Utah Goldbacks. Utah Goldbacks are made using actual gold bullion. This means that each note is pegged to the spot price of gold, which has intrinsic value. To some investors, Utah Goldbacks occupy an unprecedented spot among competing local currencies.
Goldbacks as a Local Currency
Utah Goldbacks are a local currency initially used in Utah. Over time, the popularity of the Goldback grew – and so did the company’s reach. The Goldback family has expanded to include notes from New Hampshire, South Dakota, Nevada, and Wyoming.
Utah Goldbacks are valued at least partially because of the gold they contain. Each single Goldback contains 1/1000 oz of actual gold bullion. This means that customers who purchase a 50 Utah Goldback are actually buying 1/20 oz of pure gold.
What Are Goldbacks?
Goldbacks are a local currency used in multiple different states. Because Utah Goldbacks aren’t legal tender, businesses can choose whether or not they want to accept Goldback notes for their goods and services.
By filling a massive market of collectors who yearn for the days of the U.S. Gold Standard, Goldbacks have become one of the most successful local currencies in the United States. To date, hundreds of businesses across the country have opted to accept Goldbacks in exchange for products.
A Timeline of Goldback History
Let’s take a look at the history of Utah Goldbacks. While the Goldback currency wasn’t released until 2019, the true history of Goldbacks brings us decades back to 1971.
Below, we’ll walk readers through complex history that helped shape Utah Goldbacks into the modern phenomenon it is today.
1971: The End of the Gold Standard
The history of Utah Goldbacks begins in 1971. For numismatists and gold stackers, this is one of the most significant years in the history of precious metal investing. This was the year that the United States officially ended its ‘Gold Standard.’
Under a gold standard, a government-issued currency is backed directly by actual gold. That’s right! For a period of time, every United States Dollar you held corresponded with a certain amount of physical gold held by the U.S. government.
The gold standard has a complex history in 20th century America. Throughout the 1800s and 1900s, the government tried to implement various strategies to respond to their increased production of currency and finite supply of gold.
Finally, Richard Nixon officially ended the gold standard as a part of the larger “Nixon shock,” a series of drastic economic decisions meant to curb inflation and heal the United States economy.
Although many regular investors paid little attention to this choice, it was a huge deal for gold stackers. To fans of precious metals, the gold standard represented the main way the United States Dollar tethered its value to something real and tangible. Without it, some economists feared that the currency’s value would depend entirely on, well… whatever the government says the dollar is worth.
2011: Utah Legal Tender Act
The gold standard was dead in the United States. Various political movements, including Donald Trump’s 2016 campaign, advocated for a return to the gold standard. However, the United States Dollar remains a fiat currency. In other words, the value of our currency isn’t pegged directly to any physical resource – including gold.
In 2011, Utah made one important move to help advocate for some sort of gold currency standard: the Utah Legal Tender Act. The legislation officially recognized both gold and silver bullion coins from the U.S. government as legal tender within their state’s borders.
We should note a couple of things before we keep surveying the history of Utah Goldbacks. First, this legislation did not make Goldbacks legal tender. Additionally, Utah Goldbacks don’t fall under the category of “U.S. issued gold coins,” as Goldbacks, Inc. is a private company.
2019: Goldbacks Are Created
The first Utah series was the Utah Goldbacks. This family of currencies was created just eight years after the passage of the Utah Legal Tender Act. Some investors assume that the Utah Legal Tender Act made Utah Goldbacks into legal tender in Utah.
This isn’t completely true. Instead, the Utah Legal Tender Act helped to open up the market for a gold-based currency. In a way, this law helped consumers associate gold bullion with currency. It was this law that helped to lay the foundation for the Utah Goldbacks that investors enjoy today.
2023: Goldback Sales Hit Record Numbers
Over the four years that followed, Goldbacks became increasingly popular. Goldback, Inc. estimates that there are currently over $100,000,000 worth of Goldbacks currently circulating around the country.
These numbers didn’t come out of nowhere. The popularity of Utah Goldbacks has been assisted by increasing inflation rates in the United States. As the value of the U.S. Dollar continues to decline, investors are looking for another, more consistently valuable way to conduct their businesses.
As Utah Goldbacks became more popular, they couldn’t be confined to Utah. Eventually, Goldback, Inc. released new Goldback series for Nevada, New Hampshire, Wyoming, and South Dakota.
Why Are Goldbacks Popular?
Goldbacks are popular for three main reasons. Their novelty, collectability, and gold content helps make Utah Goldbacks a popular way to invest in gold bullion.
There’s really nothing else like Utah Goldbacks on the market. Gold coins and bars have been popular for thousands of years, so it’s no surprise that these products make up the bulk of our yearly gold sales.
However, Utah Goldbacks are a genuinely unique product. They feature a small amount of gold, but also offer intricate, culturally relevant artwork on the obverse and reverse. Investors can also purchase a Goldback wallet, which allows them to store their gold investments as if they were actual dollar bills.
The variety of different designs on Utah Goldbacks makes them a highly collectable gold asset. Each note in the series features a different “cardinal virtue” represented by that virtue’s feminine personification. If you look closely, you’ll also notice even more design details that demonstrate the majesty and culture of the state where Goldbacks were born.
We find that most collectors buy Goldbacks for their collectability. Investors and gold stackers frequently complain that Goldbacks are sold at high premiums. This isn’t unfair. Goldbacks are usually marked up considerably and cost more than their melt value in pure gold.
However, Utah Goldbacks aren’t just a tool for stacking gold. For some collectors, they represent a genuine attempt at revitalizing the concept of the gold standard in the modern age.
Goldbacks contain real gold – but not very much. Each Utah 1 Goldback includes a thousandth of an ounce of actual gold. Although this isn’t a ton of gold, the numbers start to look better when you consider larger denominations of the alternative currency.
50 Utah Goldbacks contain fifty times as much gold as the single Goldback note, which means these notes are minted with 1/20 oz of pure gold bullion.
While premiums might be high for most Goldbacks, investors love their gold content paired with the currency’s unique collectability and novelty.
Looking to the Future: Are Goldbacks a Good Investment?
Are Goldbacks a good investment? We certainly think so. For the most part, investors don’t buy Utah Goldbacks hoping that they’ll earn their money back when the value of gold increases. The low amount of gold in each Goldback and the high premiums the notes are sold with mean that they may not be as effective to stack as gold coins or bars.
Still, Goldbacks are a good investment for collectors who want a new way to put their money on gold. These unique gold notes feature beautiful artwork and remind oldschool gold stackers of a time when currency was backed by actual precious metals.
Frequently Asked Questions About Goldbacks
Utah Goldbacks are a new concept to many investors. Below, we’ll take a look at four of the most frequently asked questions we get about Goldbacks from Utah.
Q: Are Goldbacks Real Money?
A: Goldbacks are real money in the sense that they can be used to purchase goods and services from some businesses. Vendors are not required to accept Goldbacks since the currency is not legal tender in the United States. However, a number of businesses across the American West have chosen to accept payment in Goldbacks.
Q: What States Accept Goldbacks?
A: As of 2024, Goldbacks have been made for Utah, Nevada, New Hampshire, South Dakota, and Wyoming. However, Goldbacks can be used in any state. To use a Goldback, you’ll need to find a business that accepts this particular alternative currency. According to Goldback, Inc., Goldbacks are accepted by a growing number of businesses in the Western United States.
Q: Are Goldbacks Legal Tender?
A: Goldbacks are not legal tender. Each Goldback note includes the line “Not U.S. Dollar Legal Tender.” While the Utah Legal Tender Act of 2011 made U.S. issued gold and silver coins legal tender, this legislation does not apply to Goldbacks. However, investors can use Goldbacks to purchase goods and services at some participating businesses throughout the United States. While Goldbacks aren’t legal tender, this doesn’t mean they can’t be used to pay for certain items in the Western United States.
Q: Why Use Goldbacks?
A: There are several reasons why people use Goldbacks. Goldbacks are pegged to the value of gold bullion, which helps give them intrinsic value. To many passionate advocates of Goldbacks, the currency represents a step forward into a new form of the gold standard, which was abandoned by the United States in 1971. Goldbacks are also a good way to do business because they might help foster community and local economics. Like other local currencies, Goldbacks help to link businesses and people together using a unique way to pay.
Final Thoughts: A History of Utah Goldbacks
Utah Goldbacks have become some of our most popular gold products. While gold coins and bars are classic, affordable ways to invest in gold, we find that a growing number of gold stackers are looking for a new way to put their money on the yellow precious metal.
As an alternative currency, the history of Utah Goldbacks is closely linked to the history of the gold standard. Like many alternative currencies, Goldbacks are not legal tender but can be used to purchase goods and services at participating businesses.
Shop Hero Bullion’s full inventory of Utah Goldbacks, and start stacking those gold notes!
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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.