Star Metro - South Dakota Lawmakers Vote To Kill Government "Transactional Gold" Boondoggle

The South Dakota Senate State Affairs Committee voted 7-1 to kill Senate Bill 112 today, making South Dakota the latest state to reject such proposals across the country. The Mount Rushmore State joins Michigan, Wyoming, New Jersey, Oklahoma, Iowa, West Virginia, Idaho, and Mississippi, which just last week rejected three similar measures that sought to entangle the state.

More specifically, SB 112 would have created an elaborate public-private partnership whereby the state enters into the market and either establishes a state bullion depository or puts the state's credibility behind one bullion depository over all competing firms while designing and overseeing a state-run precious metals purchase, storage, and electronic payment system.

Opposition testimony came from a wide array of stakeholders and constituencies, including the Sound Money Defense League, South Dakota Bankers Association, the South Dakota Chamber of Commerce, and in-state grassroots advocates.

In arguments that resonated with legislators, opponents pointed out that members of the public do not want the government intervening when the public chooses to buy, sell, store, or use their precious metals. Other testimony warned against government "mission creep" if South Dakota were to launch financial products to compete with private businesses while also creating significant reputational and regulatory risks for the state.

Here are the panoply of concerns policymakers, businesses, and investors have raised across the states when these government "transactional gold" proposals have emerged:

• Gold Payment App Ploy to Obtain Special Government Blessing and Privilege - The public-private partnership concept is backed by individuals connected with gold payment apps. Even though these apps are already available for use in every state in the country, they desire the imprimatur of state government endorsement to help attract new customers and overcome their competition.

• Vendor Tax Favoritism, Scare Tactics to Pry Customers Away From Other Businesses- Promoters have made false and extremely irresponsible marketing claims that customers of a state-selected vendor could evade federal capital gains taxes... or that members of the public could face confiscation of their precious metals if they did not patronize the state-partnered gold vendor.

• New Burdensome Regulations - Some variations of these bills would also force hundreds of small businesses (e.g. coin shops, mints) to register as Money Services Businesses or seek some other license, subjecting them to new stringent regulatory and examination burdens for no discernable benefit while imposing elaborate bank-like signup processes on customers. State regulators would be forced to take responsibility for overseeing gold market and payment activities about which they lack experience or expertise.

Other reasons lawmakers have pushed back against these proposals include:

• Buying, Selling, Storing, and Transacting Gold Is Already Legal- Private services to buy, sell, store, and transact using gold/silver are already legal and widely available. There is no need to involve the state.

• Lack of Industry Expertise & Understanding of Negative Business Impacts - These public-private partnership bills have been drafted with little apparent knowledge of precious metal depositories and dealers, the forms of precious metals that are available in the marketplace, and industry physical market practices for gold and silver coins, bars, and rounds. Most importantly, they have been drafted without sensitivity to the negative impact they would have on in-state businesses when there is no apparent need for new regulations.

• Absence of Public Demand- There is little to no demand among the public to pay taxes to the government in gold or silver, or for the government to become further involved in the purchase, use, sale, or storage of the metals (it's usually quite the opposite... the public does not want the government involved with their gold.)

"South Dakota has ranked near the top of the Sound Money Index, our yearly scorecard on sound money policies," said Jp Cortez, executive director of the Sound Money Defense League.

"The state has achieved this high ranking primarily by removing taxes, regulations, and government involvement in precious metals. Enacting a big government scheme like SB 112 would have been a large setback for the state and its citizens," Cortez continued.

South Dakota has been recognized for its gold and silver related policies, ranking 4^th place out of 50 on 2026 Sound Money Index. According to the League, a productive next step for South Dakota on the sound money policy front would be to start building a state gold reserve to protect the state's balance sheet, as states and central banks worldwide have done.

About Sound Money Defense League
The Sound Money Defense League is a non-partisan public policy group working nationally to restore sound money at the state and federal level and publisher of the Sound Money Index and Sound Money Review

[email protected]

SOURCE: Sound Money Defense League

View the original press release on ACCESS Newswire

M.Johnston--SMC