Texas Bill Proposes Creation Of Gold-Backed Digital Currency• April 12, 2023 7:00 pm • Comments
It looks like Texas continues to be one of the most crypto and blockchain friendly states in the US as the state continues to create a favorable regulatory environment for the industry.
Senator Bryan Hughes just introduced a new bill that proposes for the creation of new digital currency that would be backed by gold.
This new digital currency could then be redeemed in cash or gold and is part of the state’s initiative to create an alternative finance system that is outside of the Federal Reserve’s USD.
Based on the known details, it is clear that the bill intends to use a lot of the same mechanics as many crypto stable coins use today.
Whether or not the bill will actually gather enough support to pass in the state is still to be determined.
Texas lawmakers introduced a state based digital currency backed by GOLD
— DJ Peter Vas (31k) (@PeterVas6) April 10, 2023
The legislation would require the state comptroller to establish a digital currency that is fully backed by gold and fully redeemable in cash or gold as well. The comptroller would also be required to create a mechanism to use this gold-backed digital currency in everyday transactions.
“In establishing the digital currency the comptroller shall establish a means to ensure that a person who holds the digital currency may readily transfer or assign the digital currency to any other person by electronic means.”
The state of Texas would hold gold backing the currency in trust on behalf of the digital currency holders.
“The trustee shall maintain enough gold to provide for the redemption in gold of all units of the digital currency that have been issued and are not yet redeemed for money or gold.”
In practice, individuals would be able to purchase digital currency from the state. The state would then use the money to purchase gold that would be held in the Texas Bullion Depository or another secure vault. Individuals would be able to redeem their digital currency for dollars or gold.
It is definitely expected that there will be a lot of traditional opposition to the bill due to the fact that it could potentially take away some market share from the USD.
The concept is also slightly different than the creation of a CBDC which would be backed by fiat only and implemented by a central bank.
In order for this new digital currency that is being proposed to have any edge over a CBDC, it is essential that it is decentralized and is able to provide anonymous transactions.
After all, this is one of the negatives about CBDCs which is the fact that it invades the privacy of many users and could be used to impose spending restrictions.
So far, the bill has not yet been assigned to any committees and it has to be passed by a majority vote before it can continue.
Texas lawmakers propose a gold-backed state digital currency
The bills state that the trustee must hold a sufficient amount of gold in reserve for all units of digital currency that have been issued and are still in circulation.
What do you think?https://t.co/ByWX2XBQAN
— Coinyex (@Coinyexdotcom) April 10, 2023
“The trustee shall maintain enough gold to provide for the redemption in gold of all units of the digital currency that have been issued and are not yet redeemed for money or gold,” the bill stated.
It was added that a fee might be established “at any rate necessary” to cover the costs of administering this chapter.
Although neither of the bills has been passed or presented for a vote, both state that this act will take “effect September 1, 2023.”
Several United States lawmakers have recently argued against the U.S. introducing a CBDC.
Florida Governor Ron DeSantis stated in a March 20 press conference that CBDCs would grant “more power” to the government, adding that it provides the government “with a direct view of all consumer activities.”
— Bitcoin News (@BTCTN) April 8, 2023
Join the conversation!
We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.