Voima Weekly #18 – Can Gold Be Confiscated?

Photo from Istock

From time to time, we receive questions about extreme crisis scenarios: could a state confiscate the gold or other assets of its citizens if the economic or geopolitical situation deteriorated? The concern is understandable, as history contains a few isolated cases — but the circumstances and periods in which they occurred bear little resemblance to modern Finland or today’s Europe. In this Weekly, I will walk through the facts, the historical context, and the reality in Finland.

The core idea behind gold confiscation is that a state or central bank would forbid or seize privately held gold “in the interest of the nation.” The best-known example is the United States in 1933, when President Roosevelt issued Executive Order 6102, prohibiting Americans from holding more than five ounces of gold. Gold above that limit had to be surrendered to banks in exchange for dollars.¹ At the time, the dollar was tied to gold, and most of the country’s gold was already held by banks and the Federal Reserve. The order therefore reorganised an existing gold-backed monetary system — it was not a case of citizens carrying bars to bank counters.² It is difficult to compare this to today’s floating currency regime ³ or to Finland, where gold is not part of monetary policy (in every sense of the word) and the state has no mechanism for seizing privately held gold.

Another historical example often mentioned is Germany in the 1940s. This was not economic policy, but rather the coercive machinery of a wartime dictatorship. Gold was seized violently from persecuted populations and from occupied countries — not from citizens of a democratic state through any regular legal process.

Cyprus in 2013 is also frequently referred to, though it had nothing to do with confiscating gold or physical property. It was a banking crisis in which deposits at failing banks were written down and converted into equity — the so-called “bail-in.” It affected bank accounts, not investments, metal holdings or assets kept at home.

In today’s Europe and Finland, property rights are protected by both the Constitution and EU law.⁴ The state cannot confiscate private assets without a crime or a court ruling, and gold is not included in any emergency or preparedness legislation — unlike, for example, energy, food, or transport equipment. Gold has never been forcibly seized in Finland. During the wars, a nationwide gold donation campaign was organised, and people participated widely — legally it was voluntary, even if the social pressure of the time was undoubtedly strong.⁵ Finland still ranks among the strongest countries in the world in terms of property rights protection.⁶

One way states can influence assets is through taxation. In Finland, gold is treated in tax law no differently from other investments. By contrast, countries such as the UK, Germany and China have introduced tax incentives to encourage private gold ownership.⁷

The idea of gold confiscation today is, in practice, extremely far-fetched. Almost every household in the Western world owns some amount of gold — wedding rings, inherited jewellery or investment coins. All of this is physical gold, every bit as real as bars or sovereign coins. Confiscating such a widely dispersed and deeply embedded form of wealth would be technically difficult and socially unthinkable.

From a geopolitical perspective, confiscation is equally implausible. Major states and central banks already hold substantial gold reserves, and they have no need to seize more from their citizens — at least as long as we live in a fiat-currency system. If a state genuinely wanted to increase its gold reserves, it would be far easier simply to print money and purchase gold on the open market — as long as fiat currency is accepted in exchange.

Under what circumstances could gold even theoretically become a target for confiscation? Only in the most extreme scenario: the complete dismantling of the fiat monetary system and its replacement with something entirely new. Even then, states would focus first on asset classes that are easy to trace and control. Cryptocurrencies are a good example: they are digital, leave a permanent record, move through centralised exchanges, and have minimal state ownership.

If a state wanted to “take its share” of private wealth, the simplest and most likely method would be to increase wealth or asset taxes. This would apply to everything: real estate, businesses, shares, bonds, cryptocurrencies — and yes, to gold as well. Legally and technically, this would be vastly easier than attempting to seize any single asset class. And the easiest and most invisible tool of all is monetary expansion. When the state or central bank creates new money, the purchasing power of every currency holder is diluted equally. Throughout economic history, this has been a highly effective way to transfer wealth to the public sector. For these reasons, I consider the prospect of gold confiscation to be marginal at best. States have far simpler, quicker and more politically acceptable ways to raise revenue than attempting to seize physical gold.

Nevertheless, it is wise to follow laws and proposals that relate to property, taxation and personal freedoms — whether they concern health mandates, ownership rights, religious freedom or political expression. Both history and modern experience show that states tighten controls in many other areas long before touching physical property.

As a rule of thumb, gold is safest in your home country if you live in a state that respects the rule of law and property rights. If one lives in a country where a majority can override these principles in practice, the situation is different. One person may find safety in a monarchy such as Brunei, another in Singapore, and someone planning for inheritance or long-term wealth transfer may prefer the stability of Sweden. Each chooses in line with their own history and values.

Gold is an extremely decentralised asset class. It exists in jewellery, bars, coins, electronics and central bank reserves, held across countries and across households. This broad distribution makes it a durable cornerstone of wealth — and politically an awkward target. When ownership is this fragmented and woven into everyday life, interfering with it would be technically difficult and socially unpopular.

As we say in Finland: don’t worry — your boy is awake and watching ⁸

–Marko Viinikka
Founder, CEO
Voima Gold Oy

¹ Ironically, only a year later the United States raised the official gold price from $20.67 to $35 per ounce. In practice, the state had bought citizens’ gold cheaply and then devalued the dollar afterwards — a modern example of how a monetary system can impose a form of “taxation” through indirect means, without ever calling it a tax.

² In hindsight, compliance with the order was far from perfect — a considerable amount of gold remained in private hands, and the ban was eventually lifted in the 1970s. In other words, even a forceful and highly intrusive mandate failed to achieve a “complete gold drain.”

³ In 1933 the U.S. dollar was directly tied to gold. The Federal Reserve needed gold reserves to maintain the dollar’s value and to uphold the functioning of the entire monetary system.

⁴ Of course, in principle any law can be changed. But altering the protection of private property would require amending the Constitution and reinterpreting EU law. The political and legal thresholds for such a change are extraordinarily high.

⁵ In that campaign, Finns donated roughly 1,752 kilograms of gold items, including more than 315,000 gold rings and around 20,000 other gold objects. In return, donors received what became known as the Iron Ring.

⁶ According to the International Property Rights Index 2024, Finland ranks number one in the world for property rights protection (IPRI score 8 1), ahead of countries such as Singapore, Denmark, the Netherlands and New Zealand. The Heritage Foundation’s Property Rights Index gives Finland a score of 100/100, the highest in Europe and well above the continental average. Finland also ranks among the very top countries globally in the World Justice Project’s Rule of Law Index — 3rd out of 142 countries — where one of the key components is the protection of property and the enforcement of contracts.

⁷ In the United Kingdom, certain coins minted by the Royal Mint are exempt from Capital Gains Tax because they are legal tender. This makes them more tax-efficient than bars or foreign-minted coins. In Germany, the sale of physical gold is tax-free once the holding period exceeds twelve months. This creates a strong incentive for long-term ownership and is one reason why Germany is the largest private gold market in Europe. In China, the government has for many years encouraged citizens to own gold as part of personal savings. This reflects both cultural tradition and a strategic desire to strengthen national wealth in tangible form.

⁸ This old Finnish expression comes from wartime guard duty: “the boy” refers to the young sentry standing watch so others can rest. It simply means: someone is awake, alert, and keeping the situation safe

Disclaimer: Voima Weeklies are the personal writings of the undersigned. They do not necessarily represent the official view of Voima Gold Oy or any other company, nor do they constitute investment advice or a recommendation to purchase securities.