Senate Democrats rejected a Republican attempt to legalize gold and silver coins as usable currency amid fears about the nation's financial stability.
Democrats voted down the proposal Friday.
Republican Sen. Kent Lambert said the goal of his bill was to give consumers the option to trade in U.S.-minted gold and silver if the value of the dollar falls.
Democratic Sen. John Morse said the legislation would result in a "record-keeping nightmare."
Currently, people who want to spend gold and silver coins must convert them to paper dollars first. Minted U.S. gold and silver coins retain their face value, even if the value of the coins' precious metals rises. So a $20 gold coin minted in the 1800s is still legally worth $20, even though its real value may be thousands of dollars in today's market. Gold was trading at above $1,700 an ounce Friday.
The U.S. largely abandoned gold-backed money during World War I in order to pay for the war. President Franklin D. Roosevelt basically banned gold and silver as legal currency to prevent hoarding during the Great Depression. And in 1971, President Richard Nixon formally abandoned the gold standard.
Gold and silver coins manufactured by the U.S. Mint are mostly used for investment portfolios. People can trade them but with capital gains taxes on profits.
Utah legalized gold and silver as a currency option last year.
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