Texas lawmakers have proposed a glittering innovation that could shake up the cryptoverse: a gold-backed digital currency. In a bold move, identical bills have been introduced to create a state-based crypto asset that would be supported by the precious metal.
But the proposal has raised eyebrows, as some US lawmakers are still against the introduction of a central bank digital currency (CBDC).
Despite objections, could this new proposal put Texas at the forefront of the cryptocurrency revolution?
Introduction of Senate Bill 2334 and House Bill 4903
On March 10, Sen. Bryan Hughes and Rep. Mark Dorazio presented Senate Bill 2334 and House Bill 4903, respectively, both advocating for a digital currency that will have a fractional equivalent amount of physical gold as its backing.
The proposal stipulates that the comptroller shall create a digital currency that represents a particular fraction of a troy ounce of gold held in trust for each unit of the currency issued.
The proposal mandates the comptroller to provide a straightforward way for holders of the digital currency to transfer or assign it to others through any payment system. In addition, the comptroller is to act as a trustee and fiduciary, obligated to maintain enough gold to guarantee the redemption of all units of the digital currency that remain unredeemed for money or gold.
The bills mention the possibility of establishing a fee at a rate deemed necessary to cover the costs of administering this chapter. Although neither bill has been passed or presented for a vote, they declare that the act will take effect on September 1, 2023.
Texas Pursues Return to Gold Standard
Texas is currently pushing for the approval of projects that aim to bring the state back to the gold standard. These projects must first undergo committee hearings before being granted official law status, and receiving State Senate and House approval.
The reintroduction of the gold standard in Texas signals the state’s interest in boosting the US economy and trade, similar to the success it had in the past.
Although the digital dollar has yet to be implemented, Miami and New York have already started testing the issuance of their official tokens. This development shows that the US government is exploring the possibility of a government-backed digital currency, despite facing opposition from some lawmakers.
Opposition to CBDCs from US Lawmakers
Several US lawmakers have recently expressed their opposition to the introduction of a CBDC. Republican Senator Ted Cruz introduced a bill which aims to block the Fed from launching a “direct-to-consumer” CBDC.
Meanwhile, Florida Governor Ron DeSantis warned in a press conference that CBDCs would give more power to the government, allowing them to directly monitor consumer activities.
-Featured image from Finance Magnates