Friday, June 21, 2024

Louisiana Considers Gold Currency Platform to Harness Constitutional Provision

by David Specht
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BATON ROUGE — The House Committee on Commerce is set to convene at 9:30 a.m. today in House Committee Rooms 1 and 2 at the State Capitol in Baton Rouge to deliberate on House Bill 714, proposing the establishment of the “Louisiana Gold Currency Platform.”

Authored by Rep. Raymond Crews, the legislation seeks to capitalize on a rarely utilized provision in Article I, Section 10 of the United States Constitution, allowing states to issue currency backed by gold or silver. This initiative marks an unprecedented attempt to leverage constitutional prerogatives to introduce gold-backed currency as legal tender, potentially exempting capital gains derived from such currency from taxation.

Crews

The proposal draws inspiration from Texas, which established the Texas Bullion Depository five years ago. This facility, located outside Austin and overseen by the Comptroller of the State of Texas, provides a secure storage solution for precious metals such as gold, silver, platinum, and palladium, insured by Lloyd’s of London.

Rep. Crews’ bill envisions a partnership between the Louisiana Department of the Treasury and entities like the Texas Bullion Depository or private gold vaults. Additionally, it empowers the Treasurer to engage with companies such as Glint, which offers gold-backed accounts accessible via MasterCard debit cards, facilitating transactions in gold, dollars, and other currencies around the clock.

Supporting the legislation, Louisiana State Treasurer John Fleming, M.D., underscored its potential to provide individuals with a secure avenue to own and utilize gold as a hedge against inflation. He emphasized that the initiative would not involve the state owning or lending gold but rather facilitating secure deposits through approved facilities, ensuring depositor ownership and accessibility during business hours.

The proposed platform is intended to operate on a self-sustaining model, funded by fees for services rather than taxpayer dollars. Transaction fees generated through the platform’s operations, including gold purchases and card usage, are expected to contribute revenue to the Treasury.

However, the tax implications of gains from gold-backed currency remain a subject of debate. Proponents argue that its legal tender status and transactional nature could exempt gains from taxation, though this interpretation may face legal scrutiny.

Glint, a potential service provider for the platform, boasts a global clientele of 200,000 and offers a user-friendly app allowing individuals to open accounts and own gold with minimal deposits.

The House Commerce Committee is slated to deliberate on HB 714 during today’s session, with Treasurer John Fleming scheduled to advocate for the legislation. The proceedings are open to the public and will be accessible online at legis.la.gov.

For those interested, copies of HB 714 and other legislative documents are available for viewing at legis.la.gov.

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