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  • Two legislators in the Lone Star State are proposing a state-backed digital currency supported by physical gold.
  • The proposals indicate that the Act takes effect from September 1.

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Texas could be returning to the gold standard, this time around, with a twist of cryptocurrency, if two bills proposed in the state are anything to go by.

Senator Bryan Hughes and Representative Mark Dorazio are pushing Senate Bill 2334 and House Bill 4903, proposing a new type of state-supported digital currency backed by an equivalent amount of physical gold.

If the drafts succeed and become law, anyone purchasing the digital currency will receive an equal amount of gold bought by the comptroller from the money received from the user, where a single unit of the currency equals the value of a fraction of a troy of gold at the time of the purchase.

In part, the bill reads: ‘‘The comptroller shall establish a digital currency 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 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 another.’’

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Division among the lawmakers on CBDCs

According to the proposal, the fee related to the digital currency would be established at a rate necessary to cater for the administration cost. Although none of the bills has been presented for a vote or passed by Congress, the draft indicates that the Act takes effect from September 1, 2023. The two proposals were introduced on the same day, March 10.

However, the chances of the bills becoming law remain to be seen, considering that several lawmakers in the US oppose a central bank digital currency neither backed by the dollar nor physical gold.

For instance, Florida Governor Ron DeSantis said in a press conference on March 20 that CBDC could give the federal government so much power since it gives the authorities a direct view of consumer activities. Senator Ted Cruz shared similar sentiments, introducing a bill countering CBDCs, saying it was against financial privacy and made the dollar a dominant currency.

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CryptoWhat
CryptoWhat was created in 2015 and has become one of the most trusted and well-respected sources of information on all things crypto. The blog's authors are dedicated to providing clear, concise, and jargon-free explanations of this complex technology, so that everyone can understand it.