Overt advancement is being made by the Government of Texas towards proposing a bill that is aimed at introducing a digital currency that is fully backed by gold. A Texas House committee is currently looking into the bill. If it does become legislation, it will be a breakthrough for those seeking to transact, make payments, and utilize this currency. Also, the bill would offer users the option of exchanging their cash for the gold coins or specie that backs it.
The tangible assets users can fall back to in the case of any risk or uncertainties is a big step towards strengthening the confidence of the users of this currency. One major impact that adopting this the currency could bring about for the financial sector of Texas is that it could change the way people conduct transactions, making Texas a leader in cutting-edge financial systems.
A bill with Bill Number HB4903, proposed by Representative Mark
Dorazio has gained 42 sponsors and is now being examined by a Texas House committee. In Mark’s bill, each unit of the digital currency would represent a specific fraction of a troy ounce of gold held in trust by the State government’s comptroller. This aims to create a digital currency that is fully backed by gold specie.
The passing of this ill will obligate the state to set up an electronic system that allows citizens to make exchange this new money. This could immensely affect the financial sector in Texas because it would give the users a stable and reliable type of money with which they can make transactions that are backed by a real asset.
Furthermore, it demonstrates Texas’ readiness to try out new monetary systems, which may just open the door for other states to do likewise. We look forward to seeing how this law develops and what effect it will have on Texas’ financial system as it gains motion.
Managing Custody and Redemption Processes
The proposed bill for a 100% gold-backed digital currency in Texas is gaining traction. As it currently stands, the bill outlines that the custody of the gold backing the digital currency will be provided by the state comptroller of Texas or a third-party entity contracted for this purpose. This third party will have to maintain an equivalent amount of gold as the issuance of the digital currency, ensuring it remains fully backed by the precious metal.
Redemptions of the currency will be available in gold specie or fiat money, with the comptroller of the state or the contracted third-party managing these redemptions. While the implementation of this bill is estimated to cost the state $25 million for a limited system, a more functional transactional system could cost up to $100 million.
Despite the possible cost, the law has gained support from many. This is evident as a 78-page document that was introduced on April 26th and signed by numerous Texans called for the approval of this sound money law. If this is done, the bill may completely transform the financial system of Texas by introducing a safe and reliable form of money that is backed by real assets. It will be interesting to see the development of this law, whether it will be implemented or not, given that the potential consequences of its implementation are huge.
More States embrace gold and silver as legal tender
Several states are taking matters into their own hands by exploring alternate forms of legal tender as the US dollar comes under more pressure. One of these states is Arkansas. On April 11, it made headlines by enacting a law recognizing gold and silver as legal money, allowing its inhabitants to pay debts and obligations with precious metals without incurring tax penalties.
Though about two dozen states are also looking into laws in this path, so Arkansas is not the only state making an effort to build more varied and robust financial systems. With the challenges currently facing the world economy, the introduction of new currencies could be an innovation at such a time as this. This is a trend that should be watched closely.
Meanwhile, 23 additional states are also actively making similar policies to follow Arkansas’ lead in recognizing gold and silver as legal money.
Final Thoughts
This growing trend is an indicator of a larger transition away from reliance on the US dollar towards a more decentralized financial system. As new states support alternative currencies, the trend continues to gain motion, signaling that an end may be coming to the unrivaled dominance of the dollar.