Lawmakers in the United States are proposing bills that oppose the development of a central bank digital currency (CBDC) based on the U.S. dollar. Texas is considering an alternative approach with the potential establishment of a Texas state-issued gold-backed digital currency, Kitco reported.
The proposed legislation, Senate Bill 2334 and House Bill 4903, mandates the state comptroller to create a digital currency that is entirely supported by gold and can be exchanged for cash or gold.
Texas legislature proposes state-issued gold-backed digital currency with no purchase limits
“The comptroller shall 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,” the bills stated. They also mentioned that if needed, it is possible to involve a third-party vendor to assist in the implementation of the digital currency.
In addition to creating the gold-backed digital currency, the state comptroller would need to develop a system that enables citizens to use this currency for their everyday transactions.
“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 any other person by electronic means.”
The gold reserves that support the digital currency would be kept in a trust managed by the Texas Bullion Depository, under the control of either the comptroller or another party designated by the comptroller.
Bills mandate full redemption of digital currency with gold reserves
“The trustee shall maintain enough gold to provide for the redemption in gold of all units of the digital currency that have been issued and are not yet redeemed for money or gold,” the bills read.
Texans will not face any restrictions on the quantity of gold-backed digital currency they can buy.
After a purchase, the comptroller will be required to “buy a fractional number of troy ounces of gold equal to the number of units of the digital currency issued to the purchaser, and issue to the purchaser a number of units of the digital currency equal to the amount of gold that the comptroller purchases with the money received from the purchaser.”