Two Republican lawmakers from Texas, senator Bryan Hughes and representative Mark Dorazio, have introduced legislation to create a gold-backed digital currency that could be enacted by the state legislature. The policymakers believe that this currency could greatly benefit the Lone Star State and, as an alternative digital currency, it could provide Texas residents with the ability to circumvent a central bank digital currency (CBDC).
S.B. No. 2334 Introduces the Establishment of a Digital Currency Backed by Gold in Texas
In recent times, U.S. lawmakers have been discussing the reimposition of the gold standard, and just recently, Georgia representative Marjorie Taylor Greene advocated for its return. Specific bureaucrats have also been vehemently against the creation of a central bank digital currency (CBDC), and politicians such as Ted Cruz, Ron DeSantis, Robert F. Kennedy Jr., and Greene have opposed CBDCs. Now, two Texas lawmakers have introduced a bill (S.B. No. 2334) that would enable the state to establish a gold-backed digital currency.
“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 Texas bill states. “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,” explain the bill’s sponsors, Hughes and Dorazio.
The gold standard has long been removed from the United States, and if the bill gains traction, the U.S. Treasury Department may not approve Texas’s attempt to create a digital currency backed by gold. The U.S. government has also suppressed private creations of gold-backed alternative currencies, as it shut down Bernard von NotHaus’s Liberty Dollar headquarters on March 18, 2007. At that time, the Federal Bureau of Investigation (FBI) seized roughly nine tons of gold and silver that backed the Liberty Dollars.
In the same year that the Liberty Dollar was shut down, a U.S. federal grand jury also closed down the e-gold digital currency project operated by Gold & Silver Reserve Inc. (G&SR). However, the gold-backed digital currency proposed in the Texas bill would be operated by the state government. Despite this, 13 different states have attempted to create alternative, state-run, gold-backed currencies over the last 14 years, but all of these attempts have been unsuccessful.
The proposed gold-backed digital currency in Texas would be held in a trust controlled by the state’s comptroller. The bill notes that “certain money and deposits held in the trust are not subject to legislative appropriation.” Furthermore, the Texas lawmakers note that by “establishing the digital currency, the comptroller shall establish a means to ensure that a person who holds the digital currency can easily transfer or assign the digital currency to any other person electronically.”