Sounds like hair-splitting to me. I still believe it is illegal.
Swapping, or trading is discouraged by State and Federal Governments because it is near impossible to tax. Nevertheless, I suspect that would garner less attention from the Treasury Dept. than ‘printing money’. The last thing any person, business, state or local government wants is Treasury agents tearing their premises apart.
Oh, from a purely financial perspective I think this is a bad deal, because they are essentially floating a non-redeemable currency in exchange for a redeemable one.
I mean, duh.
What I am saying, the government says states won’t issue anything but gold or silver as money. Doesn’t apply to non-state entities, then. (Not saying I like that arrangmement either, just that it appears this is the law)