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IPFS News Link • Gold and Silver

Currency Made of Actual Gold Hoping to Reach Nevadan's Wallets

•, Faith Justis

"It's been created to be used locally so that people can purchase goods and services if they want to accept gold as payment in their business," said Goldback marketing manager Jeff Meigs. "It really gets people into the precious metals space that have never purchased gold before for around $4."

One Goldback contains 1/1000th of an ounce of gold. It's not U.S. tender, but businesses can choose to accept it as payment in states like Nevada where gold payment is legal.

The company says one of the currency's goals is to protect consumer spending power.

"The U.S. Government prints more and more dollars every day, and the more they print, the less they're worth, but gold itself, if you have gold in there, that value is separate because it's rare," Meigs said.

Some Northern Nevada businesses accept Goldbacks, but the owners say it's rare that customers bring them in.

Jacob Peterson, owner of The Reno Gold Exchange, who's accepted a handful of Goldbacks from customers, said the idea behind the business makes sense conceptually.

"From the 1940s, 30s, all the way up to today, gold has increased in value over time, and dollars seem to buy you less and less over time," he said.

But he added that the value of the currency is in its utility. A Goldback costs much more than market-rate gold, but it's sold in dollar amounts that the average consumer can afford.

Today, one full ounce of gold at market rate is just under $2,200. At that rate, a single Goldback is worth just under $2.20. But, to purchase it online costs $4.60.

It's a tradeoff that Peterson regularly sees customers choose – purchasing smaller amounts of gold at a higher rate per ounce but saving money in the sense that they can't afford a full ounce of gold.