(Sound Money Defense League, Money Metals News Service) The bipartisan SILVER Act is gaining momentum with the addition of a dozen more House and Senate cosponsors as an effort gets underway to incorporate the commonsense legislation into the National Defense Authorization Act (NDAA) during the lame-duck session.
The System Integrity through Licensed Vault Expansion and Resilience (SILVER) Act (S. 4621 and H.R. 8007) would address a longstanding national security and supply chain vulnerability in America’s precious metals markets: the extraordinary geographic concentration of exchange-approved depositories for gold, silver, platinum, and palladium in and around New York City.
The legislation is also drawing growing support from the Precious Metals Industry Coalition for Market Security & Access, whose members span every major segment of the nation’s precious metals supply chain, e.g., wholesale and retail distributors, mints, depositories, banks, refineries, mining companies, and industry trade groups.
The SILVER Act was introduced in the Senate by Jim Risch (R-ID) and Catherine Cortez Masto (D-NV), and has attracted additional support from important Senate cosponsors such as Senators Mike Crapo (R-ID), Jacky Rosen (D-NV), Ted Budd (R-NC), Mike Lee (R-UT), and Cynthia Lummis (R-WY).
In the House, the legislation was introduced by Rep. Russ Fulcher (R-ID) and has received formal support from other key cosponsors, including Reps. Mark Harris (R-NC), Susie Lee (D-NV), Mary Miller (R-IL), Mark Amodei (R-NV), Shri Thanedar (D-MI), Harriet Hageman (R-WY), John Rose (R-TN), Addison McDowell (R-NC), Tim Moore (R-NC), Pete Sessions (R-TX), Michael Cloud (R-TX), and Pat Harrigan (R-NC).
The expanding bipartisan and bicameral support comes as Congress prepares to address national defense priorities that include vulnerabilities in critical mineral supply chains and financial market infrastructure.
National Security Concerns Drive NDAA Effort
Lawmakers are embracing the SILVER Act because they recognize that a single terrorist attack, natural disaster, cyber incident, or major infrastructure failure in the New York region could severely disrupt precious metals delivery and settlement functions, with potentially far-reaching consequences for financial markets and critical supply chains.
Gold, silver, platinum, and palladium are not merely investment assets but also essential materials used in electronics, aerospace, energy systems, medical technologies, and defense manufacturing, which is why supporters of the SILVER Act highlight that geographically diversified storage and delivery infrastructure is essential for American national security and financial stability.
Current exchange practices reflect an outdated framework dating back to the 1970s, when precious metals trading and settlement relied heavily on physical paperwork, countersignatures, and proximity to New York’s financial markets. Despite significant advances in technology, logistics, and market infrastructure, depositories serving federally regulated precious metals futures markets remain concentrated in and around New York City, underscoring the need to modernize longstanding exchange practices.
“Congress has an opportunity through the National Defense Authorization Act to address a glaring vulnerability in our nation’s financial infrastructure while promoting competition, reducing costs, and strengthening domestic supply chains,” said Stefan Gleason, Chief Executive Officer of Money Metals Depository and a member of the industry coalition.
SILVER Act Corrects Outdated Exception to Established Commodity Market Practices
Unlike other commodity futures markets, including agricultural products and base metals that already use geographically dispersed delivery facilities to ensure safer and more efficient operations, precious metals depositories remain heavily concentrated in and around New York.
This concentration departs from established commodity market practices and raises concerns about competition, supply chain resilience, operational disruptions, and national security, particularly given the importance of precious metals to financial markets as well as defense and critical industries.
The SILVER Act would address this disparity by requiring systemically important derivatives clearing organizations to establish objective approval standards and transparent application procedures that provide for the inclusion of qualified depositories across the nation’s four continental time zones.
The legislation would not guarantee approval of any depository or dictate where metals must be stored. Instead, it would simply expand opportunities for qualified facilities that meet rigorous security, operational, and financial safeguards to provide services to commodity futures markets.
Industry Support for SILVER Act Spans Entire Precious Metals Supply Chain
The growing congressional support is matched by an expanding industry coalition representing businesses across the full spectrum of precious metals production, processing, distribution, financing, storage, and risk management.
Coalition members include major national bullion dealers, commercial depositories, precious metals refiners, private mints, mining-related companies, banks, logistics providers, insurers, financing companies, and industry trade associations.
The Coalition’s membership extends across the entire country, from the Northeast and Southeast to the Midwest, Texas, Mountain West, and Pacific states, reflecting the broad geographic reach of America’s precious metals industry and its diverse stakeholders specializing in mining, refining, minting, manufacturing, trading, and storage infrastructure.
“We have competing businesses from across the precious metals industry coming together behind the SILVER Act because these outdated geographic restrictions are driving up costs, limiting competition, and creating unnecessary risks for everyone throughout the country,” said Steven Reiner, Executive Vice President of Gold.com, a publicly listed (NYSE: “GOLD”), Fortune 500 company with substantial precious metal operations (including wholesale distribution, DTC retail, finance, minting and depositories) throughout North America, Europe and Asia.
In its letter to Congress, the industry coalition warned that the existing geographic restrictions also discourage investment in precious metals infrastructure outside the New York region, suppress competition, increase transportation and storage costs, and limit physical market liquidity.
CFTC Chairman Welcomes Attention to Geographic Concentration Risks
The legislation has also received favorable attention from the Commodity Futures Trading Commission (CFTC), the federal regulator responsible for overseeing U.S. commodity derivatives markets.
During an April House Agriculture Committee hearing, CFTC Chairman Michael Selig acknowledged the importance of evaluating concentration risks in precious metals delivery infrastructure and welcomed congressional attention to the issue.
“We applaud your leadership on this issue, and we’d be happy to work with your office on it,” Selig told Rep. Mark Harris.
The Treasury Department’s Financial Stability Oversight Council (FSOC) has designated certain derivatives clearing organizations as Systemically Important Financial Market Utilities (SIFMUs), reflecting their critical role in the U.S. financial system.
Often characterized as “too big to fail,” these entities are subject to heightened risk management standards, including expectations to address geographic concentration risks arising from critical market infrastructure clustered in a single region.
Since SIFMUs are foundational to the American financial system, they may qualify for special government privileges, including access to Federal Reserve services and emergency liquidity assistance. These potential benefits further underscore the importance of addressing geographic concentration risks that could threaten financial stability and increase taxpayer exposure during a crisis.
“Clearing organizations that benefit from special government privileges certainly have an obligation to address known risks, including those targeted by the SILVER Act,” concluded Gleason.
Sound Money Defense League is a non-partisan project working nationally since 2014 to promote and defend gold, silver, and sound money policy at the state and federal level. The League, working in concert with Money Metals, also publishes the annual Sound Money Index.
