Arizona Senate approves SB 1096 to establish Bullion Depository for financial security

The Arizona State Legislature's House Regulatory Oversight Committee convened on March 18, 2025, to discuss Senate Bill 1096, which proposes the establishment of the Arizona Bullion Depository under the Department of Insurance and Financial Institutions (DiFi). The bill aims to enhance the state's financial resilience by allowing the state treasurer to deposit a portion of state funds into the depository, which would be managed by a third-party contractor.

The meeting began with a detailed overview of the bill's provisions, including the hiring of a depository administrator and the establishment of compliance and audit requirements. The bill also defines "transactional currency" as a representation of precious metals and outlines procedures for transactions involving bullion and U.S. dollars.

Senator Hoffman, the bill's sponsor, emphasized the urgency of the legislation in light of the nation's escalating debt, which he described as "unsustainable." He highlighted concerns regarding the potential destabilization of the U.S. dollar as the world's reserve currency, particularly in the context of actions by BRICS nations. Hoffman argued that the proposed depository would serve as a hedge against inflation and federal debt, providing Arizonans with a means to protect their wealth.

The senator further explained the "Cantillon effect," which describes how inflation impacts different economic sectors unevenly, often benefiting investors over wage earners. He asserted that the establishment of a bullion depository could democratize wealth and provide everyday citizens with access to precious metals as a form of currency.

Following Hoffman's presentation, the committee opened the floor for questions, but no further inquiries were raised. With no public testimony presented, the committee proceeded to vote on the bill, which received a recommendation for a due pass.

In summary, the meeting underscored the legislative push towards establishing a state-controlled bullion depository as a strategic response to economic challenges, aiming to provide financial security for Arizona residents amidst national fiscal uncertainties.