Two Texas legislators have put forth identical bills to establish a state-owned digital currency that will be supported by gold, even though some US lawmakers have opposed introducing a central bank digital currency.
The proposed digital currency would be supported by a fractional amount of physical gold, with each unit of the currency representing a specific fraction of a troy ounce of gold that is held in trust. The bills were introduced by Senator Bryan Hughes and Representative Mark Dorazio on March 10.
Under the proposed bill, if an individual buys a specific quantity of the state-backed digital currency, the comptroller would utilise the funds to purchase a comparable amount of gold. The individual would then receive the digital currency equivalent to the quantity of gold bought by the comptroller. The value of the digital currency would be equivalent to the worth of the corresponding fraction of a troy ounce of gold.
The proposed bill requires the trustee to hold sufficient gold to ensure the redemption of all digital currency units that have been issued but not yet redeemed for gold or money. Additionally, the bill allows for the establishment of fees to cover the costs of administering the chapter at any necessary rate.
Neither of the bills has yet been passed or presented for a vote. The bills have an effective date of September 1, 2023.
Some US lawmakers have raised concerns about introducing a central bank digital currency, with Florida Governor Ron DeSantis stating that CBDCs would give the government more power and allow it to monitor consumer activities directly.
Republican Senator Ted Cruz also introduced a bill to prevent the Fed from launching a "direct-to-consumer" CBDC, emphasising the need to safeguard financial privacy, maintain the dollar's supremacy and foster innovation.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash