Jp Cortez, Sound Money Defense League
Chair Mehlhaff, Vice Chair Perry, and members of the Senate State Affairs committee,

Thank you for the opportunity to testify on this measure. I am writing today in strong opposition to Senate Bill 112. This ill-conceived measure seeks to entangle the state of South Dakota in a complex government boondoggle involving the gold industry.

More specifically, the proposal would set up a public-private partnership whereby the state enters into the market and either establishes a state bullion depository or throws the state’s weight behind one bullion depository over competing firms whether located inside or outside of South Dakota, while designing and overseeing a state-run electronic payment system.

This bill is anathema to free market competition and is a step in the wrong direction with respect to sound money policy. 

The basic mechanisms contemplated by the bill already exist in the private sector and are already legal. Meanwhile, there is little demand from the public to spend gold, much less pay taxes in gold. This behavior is explained by economic law (Gresham’s Law). Firms offering gold storage or payment services should compete in the private market rather than seeking special government designations.

Utah's governor vetoed a similar vendor-inspired bill in 2025. In his veto letter, he explained that his veto was because "there are significant problems that make [the bill] operationally impracticable. Additionally, I am concerned that a specific entity offered to fund the bill, which could jeopardize the required competitive process in the bill."

While these bills are certainly ill conceived, we certainly do not wish to impugn the motives of any well-meaning bill sponsors. 

The Sound Money Defense League supports principled steps that would remove barriers to private gold and silver ownership and have worked to help enact dozens of pro- gold and silver laws around the country since 2014. The monetary metals are money as affirmed by Article 1 Section 10 of the U.S. Constitution. And the decline in purchasing power of the U.S. Dollar is a very real problem. 

But the solution to this problem is not staging a partial government takeover of an industry nor a large new government program. After all, it’s big government policies and fiscal recklessness at the federal level – combined with the Federal Reserve system itself -- that spawned the very inflation and affordability crisis citizens face today.

If South Dakota truly wishes to promote sound money, the next logical step would be to better secure its financial stability and resiliency by holding an allocation of gold on the state's balance sheet like other states have been doing (along with central banks worldwide). This policy would be simpler, more impactful, and less intrusive into the private sector than what this measure proposes.