LITTLE ROCK, Ark. (April 9, 2025) – The Arkansas House passed a bill to expand the state’s legal tender law and clear the way for payments to and from the state in gold and silver.
Building on a 2023 law that recognized gold and silver specie as legal tender and repealed state taxes on both, House Bill 1918 (HB1918) passed by an overwhelming 89-1 vote.
The bill, filed by Rep. Mindy McAlidnon and three cosponsors, would expand the legal tender law to explicitly recognize gold and silver as a medium to “pay private debts, taxes, and fees levied by the state or local government if the state or local government agrees to payment with physical gold or silver.”
The Arkansas Chief Fiscal Officer would further be required to promulgate rules to contract with a bullion depository and to authorize and approve “a precious metals-backed electronic system for vendors to do business within this state.”
In effect, the bill would set up a system for the state to make and receive payments in gold and silver – using both as money rather than as a mere investment vehicle.
IN PRACTICE
The passage of HB1918 would represent another 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.
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
HB1918 now moves to the Senate. It was referred to the Senate Insurance and Commerce Committee where it must get a hearing and pass by a majority vote before moving forward in the legislative process.
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