Texas lawmakers propose a state digital currency backed by gold

By: Michael Wilson

Texas lawmakers propose a state digital currency backed by gold

April 10, 2023 5:21 AM

The bills require the trustee to keep an amount of gold equal to the total value of all digital currency units created and in circulation.


Two Texas senators have submitted identical proposals to create a state-based digital currency backed by gold, amid opposition from other US lawmakers to launching a central bank digital currency (CBDC).


Senator Bryan Hughes presented Senate Bill 2334→ on March 10, while Congressman Mark Dorazio introduced House Bill 4903→ on the same day, both declaring that the new digital currency would be backed by a fractional equal amount of actual gold.


The bills revealed that "every unit of the digital currency printed reflects a specific fraction of a troy ounce of gold held in trust."

 

One of the legislation' text. Source:  capitol.texas.gov.


According to the measure, after a person acquires a particular quantity of digital currency, the comptroller will use that money to purchase an equivalent amount of gold.


The purchaser would then receive digital currency equivalent to the amount of gold purchased by the comptroller with the purchaser's money.


At the time of exchange, one unit of digital currency must be worth the same as the corresponding fraction of a troy ounce of gold.


"The bill mandated that the trustee shall hold enough gold to provide for the redemption in gold of all bits of the digital currency which has been issued but have not yet been redeemed for money or gold."


It was also stated that a fee "at any rate necessary" could be imposed to cover the costs of administering this chapter.


Although neither measure has been enacted or put to a vote, both declare that the act will go into effect on September 1, 2023.


Some US senators have recently argued against the introduction of a CBDC in the US.


In a March 20 press conference, Florida Governor Ron DeSantis stated that CBDCs would give the government "additional power," adding that it would give the government "a direct view of all consumer behaviors."


Meanwhile, Republican Senator Ted Cruz introduced legislation on March 21 to prevent the Fed from launching a "direct-to-consumer" CBDC, claiming that it is "more important than ever" to ensure U.S. policy on digital currencies protects "financial privacy, preserves the dollar's dominance, and fosters innovation."