Two Texas lawmakers, Sen. Bryan Hughes and Rep. Mark Dorazio, have recently proposed two identical bills to create a state digital currency backed by gold instead of the U.S. dollar (USD).
The proposed laws came amid the ongoing debates around the central bank digital currency (CBDC) by lawmakers in the U.S.
- The
bill suggests that each unit of the state's digital currency should be
backed by an equivalent amount of physical gold, representing a
particular fraction of a troy ounce of gold.
- According
to the bill, the comptroller will acquire an equivalent quantity of
gold anytime a person purchases a specific amount of digital currency.
- A
unit of digital currency will be equal to the same amount in value as
the relevant fraction of a troy ounce of gold at the moment of the
transaction.
- The
trustee will be responsible for keeping enough gold on hand to redeem
all digital currency units that have been issued but not redeemed yet.
- The state is expected to set a fee to cover the costs of this process.
- Both bills show Sept. 1 as the deadline to come into effect, though they need to first pass through the legislature.
- U.S.
President Joe Biden signed an executive order last year for the federal
government to explore the potential use cases and risks of a CBDC,
igniting several debates from lawmakers around the state-backed digital
currencies in the U.S.
- Florida Gov. Ron DeSantis recently proposed
a law to ban the use of a CBDC as money in the state, citing the risks
of hindering innovation and promoting government surveillance.
- Sen. Ted Cruz from Texas also introduced a bill to prevent the Federal Reserve (Fed),
the U.S.' central banking system, from developing a CBDC, citing the
risk that these digital assets could be used as a direct surveillance
tool by the government.
