SAULT and GAULT - What are they?
I have written about
GAULT - Gold as Unpegged Legal Tender previously. Similarly, SAULT is Silver as Unpegged Legal Tender. Essentially, the idea is to establish the precious metals as a parallel currency (at market value) to the Federal Reserve's fiat dollar by removing tax disincentives and establishing modern payment rails.
The Constitution provides instruction (Article I, Section 10, Clause 1) for individual States to make gold and silver coin (and
ONLY gold and silver coin) legal tender.
Federalist paper 44, authored by James Madison under the pseudonym Publius, makes clear the Founding Father's intent was to prohibit the use of paper currency.
I'm aware of several groups that are (and have been for years) lobbying State legislatures to restore gold and silver as money as the Constitution intended. All of these folks deserve kudos and support for the work they are doing (and there may be more, but these folks are the ones I'm aware of):
Legal Tender Landslide
While
our champions made great progress getting State legislatures to enact sound money legislation over the last few years repealing various State level (sales, capital gains, etc.) taxes on gold and silver and declaring gold and silver as legal tender, 2025 is the year that legal tender legislation has finally started growing some teeth. States are now enacting legislation with the intent to establish gold and silver payment rails:
Utah - HB306 (vetoed by Governor March 27,2025 - Boooooo!)
It would have directed the State Treasurer to accredit vendors for a precious metals backed electronic payment system using gold and silver held in vaults in the State. Maybe the State legislature will try again in the next regular session.
Arkansas HB1918 (signed into law April 17, 2025 - took effect upon enactment)
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
SECTION 1. Arkansas Code § 4-56-106 is amended to read as follows:
4-56-106. Specie or legal tender — Definitions.
(a) As used in this section:
(1) "Bullion" means refined precious gold or silver metal bullion or any shape or form as adopted by rule of the Chief Fiscal Officer of the State that is valued primarily based on its metal content and not on its form or function;
(2) "Bullion depository" means an entity providing vault facilities within the United States for the storage of bullion that:
(A) Is accredited by the London Bullion Market Association for storage of bullion;
(B) Complies with the prescribed London Bullion Market Association best practice guidelines for the storage of bullion; and
(C) Has a contractual relationship to provide vault services to hold and receive deposits of specie or legal tender for an authorized precious metals-backed electronic payment system vendor;
(3) "Legal tender" means a recognized medium of exchange for the payment of debts and taxes;
(4) "Precious metals-backed electronic payment system" means an electronic payment system that:
(A) Uses bullion held in a bullion depository as backing for electronic transactions;
(B) Allows for the redemption of bullion by electronic payment system participants;
(C) Enables the account holder to make payments to a participating vendor; and
(D) Is an entity authorized and approved by the Chief Fiscal Officer of the State to provide an account that holds bullion and allows account holders to buy, sell, save, or spend bullion as a form of currency;
(5) "Specie" means:
(A) Coin having gold or silver content; or
(B) Bullion that is coined, stamped, or imprinted with its weight and purity;
...
(7)(A) "Transactional gold and silver" means a representation of physical gold, silver, specie, or bullion that:
(i) May be transferred through electronic or written instruction through a transaction by the owner of the specie; and
(ii) Is fully redeemable as physical gold, silver, specie, or bullion.1
(B) The representation of physical gold, silver, specie, or bullion under subdivision (7)(A) of this section shall reflect the exact units of physical gold, silver, specie, or bullion in its fractional troy ounce measurement or grams.
(b) Specie or legal tender shall consist of:
(1) Specie coin issued by the United States Government; or
(2) Other specie that an Arkansas court rules to be within state authority to make or designate as legal tender.
(c) Specie or legal tender shall not be characterized as personal property for taxation or regulatory purposes.
(d)(1) The exchange of one (1) type or form of legal tender for another type or form of legal tender shall not give rise to any tax liability.
(2) The purchase, sale, or exchange of any type or form of specie shall not give rise to any tax liability.
(e) Unless specifically provided by law or by contract, a person shall not compel another person to tender specie or to accept specie as legal tender.
(f) The Attorney General's office shall enforce this section without prejudice to a private right of action.
(g) If a valid contract expressly designates a type or form of specie as tender, then an Arkansas court asked to adjudicate the breach of such a contract shall require, as a remedy for the breach, the specific performance of tendering the type or form of specie specified in the contract.
(h) Specie or legal tender may be recognized 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.
(i)(1) The Chief Fiscal Officer of the State shall promulgate rules to implement and administer this section.
(2) The rules promulgated under subdivision (i)(1) of this section shall include without limitation:
(A)(i) The ability of a vendor to elect payment for goods or services from a precious metals-backed electronic payment system participant to be in either bullion or dollars at no additional cost to the vendor.
(ii) The conversion of bullion into the dollar equivalent shall be based on the terms agreed upon by the parties and provide for the acceptance of specie, legal tender, or dollars as payment for any public debt, tax, fee, or obligation owed at the option of the vendor;
(B) The security of the transactional gold and silver;
(C) That all account costs, conversion fees, or other cost associated with the transactional gold and silver account remain with the precious metals-backed electronic payment system participant, the provider of the precious metals-backed electronic payment system, and the bullion depository, as agreed to between them under a contract;
(D) Determining the sufficiency of the specie held by bullion depositories authorized in the state of their physical location;
(E) Authorizing and approving precious metals-backed electronic system vendors to do business within this state; and
(F) Fraud prevention.
Arkansas is directing the Chief Fiscal Officer to establish rules to allow for vendors to develop State approved 100% gold and silver backed electronic payment systems. These vendors must store the underlying gold and silver assets within the USA in LBMA accredited vaults. This ...
severely limits ... vendor options as the LBMA says:
There are six custodians offering vaulting services in the Loco London Market. ...
...
Although LBMA does not approve or accredit new vaults, we have compiled best practice guidelines for new vaults – as well as for the safe packing, transportation and storage of gold and silver bars.
...
Vaults provide secure locations for storing gold and silver bars (bullion), and act as gatekeepers to the Loco London Precious Metals Market. They are its custodians.
www.lbma.org.uk
As far as I can tell, the LBMA has not accredited *any* vaults within the USA (and why would they? They are a London based organization), so (a)(2)(A) appears to be a complete cockblock for developing State approved, bullion backed, electronic transaction accounts and payment systems.
Missouri - HB754 (passed legislature May 30; Governor has 45 days to veto or it becomes law without signature- takes effect ... immediately?)
408.010. 1. This section shall be known and may be cited as the "Constitutional Money Act".
2. Electronic specie currency shall be accepted as legal tender for payment of all public debts hereafter contracted in the state of Missouri and specie legal tender and electronic specie currency may be accepted as payment for all private debts hereafter contracted in the state of Missouri, in the discretion of the receiving entity; provided, however, that no person shall have the right to pay, upon any one debt, dimes and half dimes to an amount exceeding ten dollars, or of twenty and twenty-five cent pieces exceeding twenty dollars. Upon receiving a request for payment to a public entity using electronic specie, the custody agent, or other entity responsible for transmitting the payment to the public entity shall transmit the funds in United States dollars.
3. The director of the department of revenue shall promulgate rules on the methods of acceptance of electronic specie currency as payment for any debt, tax, fee, or obligation owed. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this subsection shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This subsection and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2025, shall be invalid and void.
4. Except as expressly provided by contract, no person or entity shall be required to use specie legal tender or electronic specie currency in the payment of any debt and nothing in this section shall prohibit the use of federal reserve notes in the payment of any debt.
5. Any entity doing business in this state may, if requested by an employee, pay compensation to such employee, in full or in part, in the dollar equivalent specie legal tender either in physical or in electronic transfer form. Any entity choosing to compensate its employees in specie legal tender shall be responsible for verifying the weight and purity of any physical specie legal tender before compensating employees.
6. Under no circumstance shall the state of Missouri or any department, agency, political subdivision, or instrumentality thereof:
(1) Seize from any person any specie legal tender or electronic specie currency that is owned by such person, except as otherwise provided in section 513.607. Any person whose specie legal tender or electronic specie currency is seized in violation of this subdivision shall have a cause of action in a court of competent jurisdiction, with any successful such action resulting in the award of attorney's fees;
(2) Enforce or attempt to enforce any federal acts, laws, executive orders, administrative orders, rules, regulations, statutes, or ordinances infringing on the right of a person to keep and use specie legal tender and electronic specie currency as provided in this section;
(3) Restrict in any way the ability of a person or financial institution to acquire specie legal tender or electronic specie currency or use specie legal tender or electronic specie currency in transactions; or
(4) Enact any law discriminating or favoring one means of legal tender in the course of a transaction over another means of legal tender.
7. For purposes of this section, the following terms mean:
(1) "Bullion", refined precious metal, limited to gold and silver only, in any shape or form, with uniform content and purity, including, but not limited to, coins, rounds, bars, ingots, and any other products, that are:
(a) Stamped or imprinted with the weight and purity of the precious metal that it contains; and
(b) Valued primarily based on its metal content and not on its form and function;
(2) "Electronic specie currency", a representation of actual gold and silver, specie, and bullion held in an account, which may be transferred by electronic instruction. Such representation shall reflect the exact unit of physical specie or gold and silver bullion in the account in its fractional troy ounce measurement as provided in this section;
(3) "Legal tender", a recognized medium of exchange for the payment of debts, public charges, taxes, or dues that is:
(a) Authorized by the United States Congress pursuant to Article I, Section 8 of the United States Constitution; or
(b) Authorized by Missouri law pursuant to Article I, Section 10 of the United States Constitution;
(4) "Precious metal", gold or silver;
(5) "Specie", bullion fabricated into products of uniform shape, size, design, content, weight, and purity that are suitable for or customarily used as currency, as a medium of exchange, or as the medium for purchase, sale, storage, transfer, or delivery of precious metals in retail or wholesale transactions;
(6) "Specie legal tender", includes any of the following:
(a) Specie coin issued by the federal government at any time; and
(b) Any other specie, provided such specie does not contain any insignia, symbols, or other recognizable logos of the Nazi Party.
Per my understanding, the director of the department of revenue for Missouri has to set the rules (presumably governing vaulting requirements, fee structures, etc.) for electronic specie currency. There doesn't appear to be any requirement on the director to establish these rules by a given date, so who knows when (or if!?!?) they move forward on this.
Arizona - SB1096 (passed Senate; was pending in the House Rules Committee as the legislative session ended - maybe next time)
Florida - HB199 (signed into law May 27, 2025 - takes effect July 1, 2026)
This bill is 36 pages long, so I'm only quoting some pertinent parts.
...
Be It Enacted by the Legislature of the State of Florida:
...
(2) LEGAL TENDER.—Gold coin and silver coin that meet the requirements of this section are recognized as legal tender by this state for the payment of debts incurred on or after July 1, 2026.
(a) Gold coin or silver coin recognized as legal tender in this section may not be imprinted, stamped, or otherwise marked with any name, symbol, or other information or design, including, but not limited to, any suggestion that such coin has been minted or issued by any government, except that such coin must be imprinted, stamped, or otherwise marked with the coin's weight and purity and may be imprinted, stamped, or otherwise marked with the name or symbol that identifies any refiner or mint of the gold coin or silver coin. A gold coin or silver coin that does not meet the requirements of this paragraph is not recognized as legal tender for the payment of debts in this state.
...
560.155 Gold and silver coin as legal tender.—
(1) A money services business may not be required to offer products or services, including, but not limited to, transmitting, storing, exchanging, or accepting payment in gold coin or silver coin. To the extent that a money services business offers such products or services, the money services business must do all of the following, as applicable:
(a) Except as provided in s. 560.214, maintain separate accounts for any gold coin or silver coin and not commingle such gold coin or silver coin with any other accounts that hold coin or currency of the United States or of another country.
(b) Insure the gold coin or silver coin, if not otherwise insured by an independent custodian of gold coin or silver coin pursuant to s. 560.214(1)(i), for 100 percent of the full replacement value under an all-risk insurance policy issued by a nongovernmental operated insurer that is an authorized insurer or eligible surplus lines insurer.
(c) Securely store and safeguard all physical gold coin or silver coin with a custodian of gold coin or silver coin within this state.
(d) Ensure that any gold coin or silver coin that is purchased for use or circulation as legal tender is from an accredited refiner or wholesaler as prescribed by commission rule which certifies that the gold coin or silver coin being purchased meets the requirements of gold coin and silver coin.
(e) Make disclosures to a customer at the inception of the relationship for providing products or services relating to gold coin or silver coin before a customer initially purchases or uses a money services business product or service relating to such coin, prescribed on a form adopted by the commission. The commission must adopt rules to prescribe the general form of such disclosures. Such disclosures must include, at a minimum, all of the following:
1. Notice that the value of gold coin or silver coin will fluctuate over time and that such customer should seek professional advice about whether transacting in gold coin or silver coin may incur a federal capital gains tax.
2. Notice of potential fees that may be incurred for converting gold coin or silver coin to United States dollars or other currency, or any other transaction fees that may be incurred which can be incorporated by referencing the company's terms and conditions.
3. Any additional disclosures the commission deems necessary for the protection of any person or entity that tenders or accepts gold coin or silver coin for the payment of debts, taxes, charges, or dues.
(f) Provide transparent contracts, products, services, storage terms, and fees, including, but not limited to, purchase, sale, conversion, storage, delivery, transaction, or other fees. The spot rate at which any gold coin or silver coin is converted must be disclosed at the time that the gold coin or silver coin is converted.
(g) Comply with chain of custody requirements, as prescribed by commission rule.
(h) Comply with all other applicable state and federal laws and regulations.
(2) The commission must adopt rules to implement this section.
...
Mr. Daniel Diaz, Executive Director at Citizens for Sound Money,
explained that the restriction on Florida legal tender bullion forbidding any "name, symbol, or other information or design" was added late in the negotiations and had to be accepted in order to get the bill passed. They will continue to work to fix this overly restrictive language.
The Florida legislation defines requirements for "money services businesses" to offer gold and silver electronic specie accounts. The bullion backing such an account must be held in vaults in Florida and fully (100% replacement value) insured. It appears that any gold and silver electronic specie accounts must be backed by allocated physical metal and not a commingled or pooled account.
The Florida bill seems to have established a clear road map for money service businesses to develop gold and silver electronic specie accounts and payment systems. Once the restriction on what can be used as legal tender bullion is fixed, I imagine there will be a number of companies competing to deliver services in this niche.
Texas - HB1056 (pending Governor's signature or no action by June 22 - would take effect May 1, 2027)
...
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 2116, Government Code, is amended by adding Subchapter D to read as follows:
SUBCHAPTER D. GOLD AND SILVER SPECIE AND CURRENCY
Sec. 2116.101. LEGAL TENDER. (a) To the extent authorized by Section 10, Article I, United States Constitution, gold and silver specie that meet the requirements of this section are legal tender in this state.
(b) To be legal tender in this state, gold and silver specie:
(1) must be imprinted, stamped, or otherwise marked with the specie's weight and purity and may be imprinted, stamped, or otherwise marked with a name or symbol that identifies a refiner or mint of the specie; and
(2) except for the information described by Subdivision (1), may not be imprinted, stamped, or otherwise marked with any name, symbol, or other information or design, including any suggestion that the specie has been minted or issued by a government.
(c) This section does not:
(1) restrict the electronic transfer of gold and silver specie or gold and silver currency as legal tender for the payment of a debt;
(2) apply to United States coins or currency issued or recognized under federal law; or
(3) prohibit or limit the legal tender, acceptance, or use of Federal Reserve notes in the payment of a debt.
(d) A person may not be required to offer or accept gold and silver specie or gold and silver currency as legal tender for the payment of a debt, for deposit, or for any other purpose.
Sec. 2116.102. TRANSACTIONAL CURRENCY. The comptroller may establish or authorize one or more electronic systems that enable a depositor or vendor to make and receive payments using a currency backed by gold and silver bullion held in the depository.
Sec. 2116.103. CONTRACTING. The comptroller may contract with one or more vendors to implement this subchapter. To the extent consistent with state and federal law, in contracting with a vendor under this section, the comptroller shall give preference to a vendor whose principal place of business is in this state.
Sec. 2116.104. RULES. The comptroller shall adopt rules as necessary or convenient to implement and administer this subchapter, including rules to:
(1) provide for the security of transactions in gold and silver specie and gold and silver currency and related information;
(2) determine the value of the gold and silver currency described by Section 2116.102 at the time of a transaction or in a commercially reasonable manner;
(3) establish a fee that is reasonable and necessary to administer this subchapter;
(4) authorize and approve vendors, including financial institutions, to provide an electronic system described by Section 2116.102; and
(5) adopt policies and procedures to prevent:
(A) fraud; and
(B) transactions in gold and silver specie or gold and silver currency involving a foreign adversary, or a person associated with a foreign adversary, as determined under 15 C.F.R. Section 791.4.
...
The Texas bill contains the same flawed language restricting the definition of qualified bullion as the Florida bill, but had to be accepted as the bill passed one day before the regular session for the legislature ended. A flawed bill was better than no bill (as HB1056's predecessor
HB4903 ran out of time in 2023). There is time to fix the bill before it takes effect in 2027.
As Texas already has established the
Texas Bullion Depository, this bill requires any vendors wanting to compete in offering electronic specie accounts to use the Texas Bullion Depository. This alleviates a lot of the hand wringing about vaulting requirements seen in legislation from other States as well as establishes a floor on the related fee structure and insurance issues with vaulting metal.
The bill actually gives the State Comptroller the option of developing an electronic specie account system directly (backed/guaranteed by the State of Texas) or to accredit one or more similar offerings from vendors. It's possible that the State Comptroller does both - establishing (for example) a Texas bullion debit card while accrediting some crypto fintech to develop a gold and silver tokenized crypto offering.
Like an Avalanche Heading Down the Mountain
It seems like the sound money snowball has really started to roll and gain momentum. I see this issue playing out in a similar dynamic to the Marijuana issue. The Federal Government oppose(s/d) it strongly. But some States took the initiative to buck the Federal Government. First Medical Marijuana in a few States, then Medical Marijuana in most States and now recreational Marijuana gaining acceptance. The Federal Government has resisted, but the writing is on the wall and they are starting to concede the issue.
The same dynamic will likely play out with gold and silver legal tender. The snowball of public opinion and demand will grow as more States enact these bills and payment rails actually get built and used. I mean, it's not like the Federal Reserve is going to start reversing course and allowing deflation in an effort to increase the value of the dollar versus gold and silver. Even if people aren't tuned in to the issue of sound money, they will perceive value when it is available to them. Sound money will shine again.
