SILVER Act: Reforming US Precious Metals Depositories in 2026

The Hidden Infrastructure Problem Reshaping U.S. Precious Metals Markets

Institutional markets rarely fail dramatically. More often, they calcify quietly, accumulating outdated rules and geographic dependencies that compound over decades until the structural fragility becomes impossible to ignore. That is precisely the situation now confronting U.S. precious metals markets, where Silver Act precious metals depositories have become central to a policy debate that could reshape how gold and silver futures contracts are physically delivered in the digital age.

The intersection of legislative reform, national security, and market competition has placed precious metals infrastructure at the centre of one of the most consequential policy debates in the sector's recent history. Furthermore, the outcomes will shape access, cost, and resilience for investors, miners, refiners, and dealers across the country.

What the 150-Mile Rule Actually Means and Why It Persists

The Cold War-Era Constraint Still Governing Modern Markets

The rule that currently defines which precious metals depositories qualify for exchange-approved futures delivery is not a product of modern market analysis. It traces directly to 1970s-era settlement logistics, when warehouse receipts required physical handling and wet signatures. Counterparties needed to physically exchange documents across short distances, making geographic proximity to New York City a practical operational necessity rather than a policy choice.

That operational context dissolved decades ago as digital settlement infrastructure eliminated the need for physical document transfer. Yet the 150-mile radius rule remained embedded in COMEX exchange regulations, effectively preserving a geographic monopoly that was originally an accident of logistics rather than a deliberate market design.

The result is a framework where approximately 98% of U.S. geography is structurally excluded from exchange-eligible precious metals depository participation, regardless of facility quality, operational capability, or proximity to actual mining and refining activity. Facilities like the Idaho-based Money Metals Depository, which meets all relevant quality standards, cannot participate in COMEX futures delivery settlement solely because of their location outside the defined radius.

The National Security Dimension of Geographic Concentration

The concentration of institutional precious metals storage within roughly 100 miles of the U.S. Eastern Seaboard is not merely a market efficiency problem. It represents a single-point-of-failure vulnerability in the physical infrastructure underlying one of the world's most important commodity markets.

The historical logic behind Fort Knox's inland construction is instructive here. U.S. policymakers in the mid-20th century recognised the strategic risk of concentrating sovereign gold reserves in a coastal location and deliberately moved them inland as a resilience measure. That same risk-distribution reasoning now underpins legislative arguments for geographic reform of exchange-approved depository infrastructure.

The same national security logic that prompted the construction of Fort Knox as an inland repository in the 20th century is now being applied to argue for a geographic overhaul of exchange-approved precious metals depositories in the 21st.

Timeline: U.S. Precious Metals Depository Regulation

The SILVER Act: Full Legislative Breakdown

Formal Name, Scope, and Regulatory Authority

The System Integrity through Licensed Vault Expansion and Resilience Act, known by its acronym SILVER Act, is bipartisan federal legislation introduced in 2026 that targets the Commodity Futures Trading Commission (CFTC) as its primary regulatory vehicle for reform.

A critical distinction exists between the two categories of approved precious metals storage in the United States. The 11 IRS-approved depositories currently serving the market handle precious metals custody for individual retirement accounts and include facilities operated by companies such as Brinks, Delaware Depository, and the Texas Bullion Depository. These facilities are distributed across a broader national geography. The SILVER Act does not primarily target this category.

Its focus is the far more restrictive category of exchange-approved depositories eligible for futures contract physical delivery, which under current rules are effectively confined to the New York metropolitan area. Understanding the LBMA and COMEX markets helps clarify why this geographic restriction has such profound implications for global precious metals pricing and delivery mechanisms.

Key Provisions at a Glance

The Coalition Behind the Legislation

The reform effort is not the product of a single lobbying interest. A precious metals coalition led by Money Metals Exchange, comprising more than 40 businesses spanning depositories, dealers, refiners, mints, and mining operations, has coordinated the legislative campaign. Bills have been introduced in both the House and Senate, and an amendment to the National Defense Authorization Act (NDAA), a must-pass annual military spending bill, has been filed incorporating Silver Act precious metals depositories provisions.

The NDAA filing is strategically significant. Must-pass legislation provides a pathway to enactment that bypasses the procedural obstacles that defeat standalone bills. Consequently, if incorporated into the NDAA, the SILVER Act provisions would carry the legislative momentum of the broader defence authorisation process.

Anti-Competitive Market Dynamics Created by Geographic Restriction

Who Bears the Cost of the Current Framework

The absence of any formal application process for depositories located outside the 150-mile radius is not a passive regulatory gap. It functions as an active barrier to entry that structurally advantages incumbent New York-area bullion banks while pricing out competitors in regions where the actual work of gold and silver production occurs.

The economic consequences are direct:

• Individual futures investors outside the Northeast pay elevated logistics and storage costs
• Regional mining operations cannot offer exchange-eligible delivery from proximate facilities
• Non-New York refiners and mints are excluded from institutional settlement participation
• Western U.S. bullion dealers face structural disadvantages competing with New York-adjacent counterparties

Consider a hypothetical Nevada-based refiner producing COMEX-grade silver bars. Under the current framework, that refiner cannot offer exchange-eligible storage regardless of facility quality. Institutional buyers must arrange transport to New York-area vaults, adding cost and counterparty risk. Post-SILVER Act, a CFTC-supervised transparency pathway would allow the same facility to apply for exchange eligibility, enabling Mountain and Pacific time zone investors to settle contracts locally.

The Two-Tier Depository System Explained

How a Futures Delivery Settlement Works Through an Approved Depository

Understanding why geography matters requires understanding the mechanics of physical delivery in futures markets:

1. A futures contract approaches expiry and a buyer elects physical delivery
2. The exchange confirms the delivery location must be an approved depository
3. Under current rules, only New York-area facilities qualify for this settlement
4. Warehouse receipts are issued confirming metal ownership at the approved vault
5. Transportation costs from non-qualifying regions are borne by counterparties
6. Under the SILVER Act, steps 2 through 5 would expand to qualified vaults across all four continental time zones

The Florida Sound Money Bill: A Cautionary Case Study in Regulatory Overreach

What Went Wrong with Florida's HB 999

Not all legislative activity described as sound money reform advances the interests of precious metals markets or the investors who rely on them. Florida's House Bill 999, signed into law in 2025, is the most instructive recent example of reform language being used to describe what is functionally a regulatory expansion.

The legislation classified brick-and-mortar precious metals dealers as money service transmitters, imposing an entirely new compliance framework on businesses that had not previously operated under that regulatory category. The practical consequence is a 40-page disclosure and reporting regime requiring businesses to upload detailed information about clients, business plans, and operational practices to state authorities.

Warning: Florida's HB 999 represents a structural risk to precious metals market privacy. By classifying gold and silver dealers under money-transmission frameworks, the legislation creates a government-accessible surveillance infrastructure over buyer and seller activity, which is fundamentally at odds with the financial independence that physical metals are designed to provide.

State regulators who participated in the rules-drafting process following the bill's passage reportedly indicated they lacked both the expertise and the mandate to oversee precious metals dealers as financial transmitters. Proposed amendments that would have stripped out the most damaging provisions were incorporated into a revised bill, then reversed at the final stage, reverting to the original problematic language.

The Political Economy of Poorly Constructed Sound Money Legislation

Examining why the bill took the form it did reveals several contributing factors:

• Vendor favouritism: Commercial interests were involved in drafting language that would allow businesses to market themselves as state-endorsed precious metals operators, creating government-backed competitive differentiation
• Legislative inexperience: Multiple parties with conflicting agendas and limited industry knowledge participated in drafting, producing internally inconsistent legislation
• State recognition logic: Some advocates pursued the bill under the assumption that state classification as legal tender would increase precious metals adoption, trading privacy protections for nominal recognition

The long-term structural risk created by this approach extends beyond Florida's current political environment. Surveillance infrastructure, once embedded in law, is available to any future administration regardless of political alignment.

Key risks created by Florida-style regulatory frameworks include:

• Centralised buyer and seller data accessible to government agencies
• Compliance costs that create structural disadvantages for small and mid-size dealers
• Precedent for replication in other states pursuing similar legislation
• Erosion of financial privacy that underpins precious metals' core value as alternative assets

State-Level Sound Money Progress: Maryland and Virginia as Reform Models

Maryland's Sales Tax Reversal

The Maryland precious metals market provides a clear empirical data point on the consequences of taxation in this sector. In 2023, Maryland legislators removed the existing sales tax exemption on precious metals purchases, treating the industry as a revenue opportunity. The market response was immediate. Businesses began closing operations in the state, and conventions and coin shows relocated to neighbouring jurisdictions.

One dealer testified that his business experienced a 72% revenue decline on the first day the tax took effect, as buyers shifted to out-of-state and online purchasing alternatives. Maryland legislators found themselves collecting less tax revenue while simultaneously destroying the industry they had sought to monetise.

Key Data Point: Maryland's precious metals sales tax experiment produced a measurable market contraction almost immediately, with one dealer reporting a 72% loss of business volume on the first day the tax took effect, as consumers shifted purchasing to tax-free states and online platforms.

Through a combination of industry testimony, legislative advocacy, and grassroots mobilisation, the exemption was ultimately restored and embedded in the state budget, protecting the industry through 2028. The eventual outcome demonstrated the power of organised advocacy, however the unnecessary economic disruption created during the intervening period illustrated the real cost of poorly considered tax policy in this sector.

Virginia's Sound Money Milestone and the National Picture

Virginia's recent legislative progress on precious metals tax treatment contributes to a multi-state momentum shift that has been building since 2014. The broader gold and silver markets continue to be shaped by these state-level policy developments, in addition to the federal legislative activity surrounding the SILVER Act.

State-by-State Sound Money Reform Status (Selected States)

Reform categories achieved at the state level include sales tax removal, capital gains tax exemptions, legal tender reaffirmation statutes, and state gold reserve establishment programmes. The accumulated effect of this state-level activity represents a meaningful shift in the policy environment for precious metals, even as federal infrastructure reform through the Silver Act precious metals depositories legislation remains in progress.

What the SILVER Act Means for Precious Metals Investors and the Broader Market

Practical Implications for Market Participants

The market efficiency benefits of the SILVER Act extend across multiple participant categories:

• Futures investors outside the Northeast would face reduced storage and delivery costs through vault competition
• Mining operations in Western states could offer exchange-eligible delivery from proximate facilities
• Refiners and mints excluded from institutional settlement would gain access to COMEX-eligible market participation
• Bullion dealers across broader geographies would compete on more equal terms with New York-adjacent counterparties

The creation of a formal, CFTC-supervised application process for non-qualifying vaults is itself a structural improvement, regardless of how many facilities ultimately receive approval. For investors weighing options between physical gold vs ETFs, the expansion of geographically distributed exchange-eligible storage meaningfully reduces one of the practical friction points associated with physical metal ownership.

The Two Competing Legislative Philosophies

The contrast between the SILVER Act and Florida's HB 999 illustrates two fundamentally opposed approaches to precious metals policy reform. The SILVER Act represents a market-liberalisation intervention, seeking to reduce concentration, increase competition, and distribute infrastructure risk across the national geography.

Florida's HB 999, however, represents regulatory expansion dressed in sound money language, embedding government oversight into a market that derives core value precisely from operating outside conventional financial surveillance frameworks. The precious metals tariff impacts currently reshaping global supply chains make this domestic regulatory divergence even more consequential for market participants planning long-term positioning.

Strategic Outlook: The SILVER Act represents the most structurally significant federal intervention in precious metals market infrastructure in decades. If enacted through the NDAA, it would fundamentally redistribute market power away from New York-concentrated bullion banking interests toward a nationally distributed, competition-driven depository ecosystem.

What Sound Money Advocates Are Watching in 2026

Several developments will determine the near-term trajectory of precious metals legislative reform. For investors considering safe-haven gold investing strategies, these policy developments carry direct practical significance for storage costs, delivery logistics, and counterparty risk management.

Key areas to monitor include:

• NDAA amendment progress and the likelihood of Silver Act precious metals depositories provisions surviving the conference process
• Maryland's 2028 sunset date on its current sales tax exemption, which will require renewed advocacy
• Whether Florida's HB 999 regulatory model attracts legislative imitation in other states
• CFTC rulemaking activity on depository transparency and eligibility criteria independent of legislative action

The legislative environment for precious metals is more active than at any point in recent memory. Industry advocates and investors can learn more about precious metals depository options currently available as the reform landscape continues to evolve. Whether the dominant trend moves toward market liberalisation and privacy protection, or toward regulatory expansion and government integration, will depend significantly on the advocacy capacity of the industry coalition that is already demonstrably capable of moving legislation at both state and federal levels.

This article is intended for informational and educational purposes only. It does not constitute financial, legal, or investment advice. Legislative outcomes described are subject to change and readers should conduct independent research before making any investment or compliance decisions.

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