BOISE, Idaho (Feb. 21, 2025) – Yesterday, an Idaho House committee passed a bill that would officially recognize gold and silver as legal tender in the state. Passage into law would set the stage for the people themselves to undermine the Federal Reserve monopoly by introducing competition into the monetary system.
Under the Idaho Constitutional Money Act of 2025, gold and silver coins and specie minted domestically would be recognized as legal tender in the state and would be “accepted for the satisfaction of debts under the laws of the state of Idaho or of the United States.”
Specie is defined in the bill as “stamped or imprinted coin having gold or silver content; or refined gold or silver bullion that is coined, stamped, or imprinted with its weight and purity and valued primarily based on its metal content and not its form.”
The legislation specifically declares, “The state may also elect to use gold and silver coin and specie in conducting its business.”
The House State Affairs Committee filed the legislation as House Bill 177 (H177). On Feb. 20, the Committee reported H177 out with a “do pass” recommendation.
The passage of H177 would make Idaho the sixth state to recognize gold and silver as legal tender, as they always should have been doing. Utah led the way, reestablishing constitutional money in 2011. Wyoming, Oklahoma, Arkansas, and Louisiana have since joined.
IN PRACTICE
The bill’s legislative findings declare, “The Legislature hereby recognizes the right of Idahoans to conduct business in gold and silver coin and specie uninhibited at their own discretion as a right never delegated by the people of Idaho to any governmental institution.”
Practically speaking, this would allow Idaho residents to use gold or silver as money rather than as mere investment vehicles.
Passage of H177 would represent a big first step against the fiat-based Federal Reserve system by creating a foundation to pull the rug out from under it on the state and local levels. In essence, it would set the stage for the people themselves to undermine the Federal Reserve monopoly by introducing competition into the monetary system.
The next step would be for people to start taking advantage of the status of gold and silver as money by using both as such instead of Federal Reserve notes.
The effect has been most dramatic in Utah where the Specie Legal Tender Act opened the door for the development of a robust gold and silver economy in the state. With some legal hurdles cleared away by the state’s legal tender law, the United Precious Metal Association (UPMA) in partnership with Alpine Gold Exchange set up the state’s first “gold bank.”
The Act has also led to the creation of the Goldback, a local, voluntary medium of exchange. Goldbacks are notes made from fractions of an ounce of physical gold. The company created a process that turns pure gold into a spendable physical form for small transactions.
New Hampshire also boasts a thriving gold and silver economy. While the state does not officially recognize bullion as legal tender, this has not deterred thousands of residents from using it in private transactions. Because there are no state tax barriers on precious metals, a favorable tax climate – combined with a population willing to embrace sound money – has positioned New Hampshire as another model for others to follow.
GOLD CONTRACT CLAUSE
Beyond the provisions to make gold and silver legal tender, H177 includes language recognizing gold or silver contract clauses.
“Unless expressly provided by statute or by contract, no person or other entity may compel another person or other entity to tender or accept gold or silver coin or specie unless agreed upon by the parties.”
In practice, including language acknowledging gold contract clauses means if parties voluntarily agree to be paid, or to pay, in gold and silver coin or bullion, Idaho courts could not substitute any other thing, e.g. Federal Reserve Notes, as payment.
The principle behind a gold clause contract is simple. It requires that payment must be made in a specific amount of gold or its paper equivalent. For example, a mortgage might stipulate that repayment must be in the form of 30 ounces of gold. Gold clauses protect the parties to a contract from currency debasement, and incentivize the use of sound money.
BACKGROUND
The United States Constitution states in Article I, Section 10, “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts.” Currently, all debts and taxes in most states are either paid with Federal Reserve Notes (dollars) which were authorized as legal tender by Congress, or with coins issued by the U.S. Treasury – very few of which have gold or silver in them.
The Federal Reserve destroys this constitutional monetary system by creating a monopoly based on its fiat paper currency. Without the backing of gold or silver, the central bank can easily create money out of thin air.
This not only devalues your purchasing power over time; it also allows the federal government to borrow and spend far beyond what would be possible in a sound money system. Without the Fed, the U.S. government wouldn’t be able to maintain all of its unconstitutional wars and programs. The Federal Reserve is the engine that drives the most powerful government in the history of the world.
State bills that facilitate and encourage the use of sound money create a playing field where people can push back against the Fed’s monetary malfeasance. Ultimately, it could create a scenario where people can drive out the “bad” fiat money with “good” sound money.
WHAT’S NEXT
H177 can now move to the full House for further consideration.
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