Arizona to be second state in the US to legally accept gold, silver as tender

Arizona lawmakers have voted in favour of legally accepting gold and silver coins as well as bullion as a currency in the state, driven mostly by worries about the strength of the world’s monetary system.

On Tuesday the GOP-led Senate gave final approval to the bill that would make Arizona the second state in the nation, after Utah, to make the two most popular precious metals a legal currency. If signed into law by Governor Jan Brewer, the measure would take effect next year.

Utah passed a similar legislation in 2011, which gives equal legal status than existing U.S. currency issued by the federal government to silver and gold coins.

While the law would make the precious metal legal tender in Arizona, it would not force businesses to accept either of them as a form of payment. The state Department of Revenue would also not be required to accept either as payment of state income taxes.

Once the governor gets the bill, she will have five days to sign it, veto it or let it become law without her signature.

Other states such as Minnesota, North Carolina, Idaho, South Carolina, Colorado and Maine have debated similar laws in recent years.

RELATED: A history of gold confiscation 

Gold-backed money fell out of favour during World War I because the US and other nations found themselves forced to print more cash to pay for the war. President Richard Nixon formally abandoned the gold standard in 1971.