Texas has taken its first steps in order to approve a bill that would issue a 100% gold-backed digital currency. If enacted as law, the bill, which is being discussed by a Texas House committee, would create an electronic system for users to transact and pay with this digital currency and would also allow them to execute redemptions for the gold specie, or coins, backing it.
Texas House Committee Passes Gold-Backed Digital Currency Bill
A Texas House committee has taken the first steps in the discussion of a bill that creates a digital currency 100% backed by gold specie. The bill, identified as HB4903, which was introduced on March 10 by Representative Mark Dorazio, has garnered the support of 42 sponsors and is ready to exit by the House State Affairs Committee to be voted on by the House.
The bill specifies that the comptroller of the state will “establish a digital currency that is backed by gold so that each unit of the digital currency issued represents a particular
fraction of a troy ounce of gold held in trust.” In the same way, the state will have to design an electronic system to allow citizens to freely transact with this currency to make payments.
Custody and Redemptions
The bill, in its current state, establishes that the custody of the gold backing the digital currency will be provided by the Texas state comptroller, or can be assigned to a third party, which will have to maintain the same amount of gold as the issuance of the digital currency, making it a 100% backed digital currency.
Redemptions of the currency will be processed in gold specie or in money, with the comptroller of the state or a contracted third party managing these redemptions. The implementation of this bill would cost the state $25 million for a limited system, with a more functional transactions system costing up to $100 million, according to estimations.
However, the bill has managed to get grassroots support, evidenced by a 78-page document introduced on April 26, signed by several Texans calling for the approval of this sound money law.
Other states are also pursuing laws to establish alternatives to the U.S. dollar as a transactional and reserve currency. On April 11, Arkansas passed a bill that makes gold and silver legal tender, allowing its citizens to use gold specie to legally pay debts and obligations without having tax implications, and 23 more states are also involved in similar legislation.
What do you think about Texas’ gold-backed digital currency bill? Tell us in the comments section below.
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Author: Sergio Goschenko