Texas lawmakers have introduced a bill proposing the creation of a gold-backed digital currency. Senator Bryan Hughes and Representative Mark Dorazio have introduced the bill (S.B. No. 2334) that would enable Texas to establish a gold-backed digital currency that would be operated by the state government. The proposed digital currency would be held in a trust controlled by the state comptroller and would be backed by a particular fraction of a troy ounce of gold held in trust. The bill’s sponsors argue that a gold-backed digital currency could provide Texas residents with the ability to circumvent a central bank digital currency (CBDC).
While there have been discussions among U.S. lawmakers about the reimposition of the gold standard, the U.S. government has suppressed private creations of gold-backed alternative currencies. The proposed bill may face opposition from the U.S. Treasury Department, which could refuse to approve Texas’s attempt to create a digital currency backed by gold. Nonetheless, Texas lawmakers are hoping that the proposed gold-backed digital currency would be a means to ensure that a person who holds the digital currency can easily transfer or assign it to any other person electronically.
Several U.S. politicians, including Ted Cruz, Ron DeSantis, Robert F. Kennedy Jr., and Georgia representative Marjorie Taylor Greene, have opposed central bank digital currencies (CBDCs). The proposed gold-backed digital currency would be an alternative digital currency and could provide Texas residents with the ability to circumvent a CBDC. While 13 different states have attempted to create alternative, state-run, gold-backed currencies over the last 14 years, all of these attempts have been unsuccessful. Therefore, the proposed bill’s success remains to be seen.
In conclusion, if the bill gains traction and is approved, Texas would become the first U.S. state to establish a gold-backed digital currency. As a result, it could be a significant move towards providing Texas residents with the ability to circumvent a central bank digital currency. Nonetheless, the success of the proposed bill remains to be seen, as it may face opposition from the U.S. Treasury Department.
