A bill ensuring that Arizona residents can use gold and silver as legal money is one step closer to the governor's desk, after it passed through an important Senate committee and has already passed the House.

Arizona State Representative Mark Finchem, who introduced the bill, said the problem with a system based solely on Federal Reserve notes is that it is subject to inflation, so the buying power of each dollar decreases over time, reported the Arizona Daily Star.

"When we have a fiat currency that is continually bouncing up and down relative to the price of oil and other market conditions, we are at risk," he said.

If this law passes, gold and silver purchases would be protected from state capital gains.

Currently, they're like any other stock. If they buy low and sell high, they have a captain gain that's taxable.

HB2173 passed through the Senate Financial Institutions Committee by a 4-2 vote on Feb. 25. It previously passed through the state house by an overwhelming 34-23 margin.

According to the 10th Amendment Center, "Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people. Nullifying the Fed on a state by state level is what will get us there."

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