PHOENIX, Ariz. (Mar. 3, 2025) – PHOENIX, Ariz. (Mar. 3, 2025) — The Arizona Senate has approved a bill to establish a 100% gold and silver-backed currency recognized as legal tender, supported by a state-run bullion depository.
Sponsored by Senators Jake Hoffman and Rachel Jones, Senate Bill 1096 (SB1096) passed the Senate with a vote of 17-12, and now moves to the House for further consideration.
100% GOLD AND SILVER-BACKED LEGAL TENDER
Under SB1096, Arizona would establish a fully backed gold and silver currency, recognized as legal tender. The measure requires the Arizona Department of Insurance and Financial Institutions to issue specie – defined as gold or silver coins minted to a standard shape, size, and purity – and establish a transactional currency backed 100% by physical gold or silver held in a state-run bullion depository.
The transactional currency would function as a representation of actual precious metals stored in the depository, allowing electronic transfers based on precise fractional troy ounce measurements. The depository would oversee all transfers, ensuring they remain fully backed by physical gold or silver.
As legal tender, both the physical specie and gold and silver-backed transactional currency could be used by individuals, businesses, and the state for debts, taxes, and everyday transactions – offering an alternative to inflationary fiat. The legislation states:
“A person or this state that holds the transactional currency may use that transactional currency as legal tender to pay a debt or may assign the transactional currency to another person or this state.”
By establishing a framework for sound money, SB1096 positions Arizona at the forefront of efforts to reduce reliance on the Federal Reserve’s fiat monetary system.
DEPOSITORY
The depository provisions are based on a similar law that was passed in Texas and signed into law by Gov. Abbott in 2015.
The bullion depository would serve as the “custodian, guardian and administrator of certain bullion and specie that may be transferred to or otherwise acquired by this state or an agency, a political subdivision or another instrumentality of this state.”
The proposed law specifies that the state treasurer “may deposit a portion of state monies in the depository in the form of bullion, and that bullion deposit is considered part of this state’s financial reserves.”
Private individuals and businesses would also be able to deposit bullion into the depository.
IMPACT
The passage of this legislation would create a sound money alternative to U.S. dollars in both physical and electronic form.
Using gold and silver-backed transactional currency, any person or entity would be able to do business using a debit card that seamlessly converts gold and silver to fiat currency in the background. Private individuals and businesses would be able to purchase goods and services using assets held in the Arizona Gold Depository in the same way they use dollars held in a bank today.
Gold and silver-backed transactional currency would give people a way to shield themselves from the rapid loss of purchasing power inherent in the fiat dollar.
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 laws 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
SB1096 will now move to the House, where it will need to passed out of committee before moving forward in the legislative process.
