HARTFORD, Conn. (April 15, 2025) – A bill filed in the Connecticut Senate would officially recognize gold and silver as legal tender in the state, repeal state taxes on their use and exchange, and take other steps to promote gold and silver as money. Passage into law would set the stage for the people themselves to undermine the Federal Reserve monopoly by introducing competition into the monetary system.
The House Finance, Revenue and Bonding Committee filed Senate Bill 1552 (SB1552). Under the proposed law, gold and silver coins issued by the U.S. government, along with gold and silver bullion, would be deemed legal tender in Connecticut. To facilitate its use, the Banking Commissioner, in consultation with the Treasurer, would be required to issue guidelines for integrating the use of gold and silver in commercial activities and financial transactions in the state.
On April 14, the Joint Committee on Finance, Revenue and Bonding held a public hearing on SB1552, an important first step in the legislative process.
The enactment of SB1552 would make Connecticut the seventh 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, Louisiana, and Idaho have since joined.
IN PRACTICE
Practically speaking, this would allow Connecticut residents to use gold or silver as money rather than as mere investment vehicles.
The passage of SB1552 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, SB1552 includes language recognizing gold or silver contract clauses.
“No individual or entity shall be required to accept such coins or bullion in any transaction unless contractually agreed upon.
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, Connecticut 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.
REMOVING TAXES
SB1552 would repeal the state capital gains tax on gold and silver bullion, along with a sales tax on bullion purchases under $1,000.
Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs.
Exempting the sale of bullion from capital gains taxes takes another step toward treating gold and silver as money instead of commodities. Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs.
Imagine if the IRS sent you a bill every time the dollar strengthened against the euro. That’s effectively what capital gains taxes on gold and silver do. As the precious metals prices go up due to the devaluation of the dollar, the government levies a tax on you. It is essentially a tax on the superior performance of gold and silver as money.
“We ought not to tax money – and that’s a good idea. It makes no sense to tax money,” former U.S. Rep. Ron Paul said during testimony in support of an Arizona bill that repealed capital gains taxes on gold and silver in that state. “Paper is not money, it’s fraud,” he continued.
BULLION DEPOSITORY
SB1552 includes provisions to establish a state bullion depository to “encourage the investment in and ownership and use of gold and silver as mediums of exchange and wealth preservation and to promote economic stability through gold-backed financial instruments.”
The depository provisions are based on a similar law that was passed in Texas and signed into law by Gov. Abbott in 2015.
The law would authorize the despoitory to issue gold-backed certificates “as a sanctioned gold-backed medium of exchange within the state.” These certificates would be backed 100 percent by gold held in the depository and include the following features.
- Be redeemable for physical gold or its equivalent market value in United States currency;
- Be issued in standardized denominations recognized by national and international standards of weights and measures for gold;
- Incorporate advanced security measures, such as serial numbers, anticounterfeit holographic images, or government verification seals;
In effect, the gold certificates would function as a transactional currency that could be used by individuals and businesses for everyday transactions – offering a sound money alternative to inflationary fiat.
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
SB1552 needs to be brought up for a vote in the Joint Finance, Revenue and Bonding Committee and pass by a majority before moving forward in the legislative process.
