Despite opposition from several United States lawmakers against introducing a central bank digital currency (CBDC), Two Republican lawmakers from Texas have introduced legislation that could see the state establish a gold-backed digital currency.
Senator Bryan Hughes and Representative Mark Dorazio introduced Senate Bill 2334 and House Bill 4903 on March 10, respectively. The legislation states that a fractional equivalent amount of physical gold would back the digital currency.
The bills propose that “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.”
Once a person purchases a certain amount of digital currency, the comptroller uses the money received to buy an equivalent amount of gold. The purchaser would then receive digital currency equal to the amount of gold that the comptroller purchases with the money.
“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 bill stated.
The proposed bills for the gold-backed digital currency have an effective date of September 1, 2023, but have not yet been presented for a vote or passed into law.
The proposal comes as several U.S. lawmakers have argued against introducing a central bank digital currency. Florida Governor Ron DeSantis has said that CBDCs would grant “more power” to the government and provide it “with a direct view of all consumer activities.”
Republican Senator Ted Cruz has introduced a bill to block the Fed from launching a “direct-to-consumer” CBDC, stating that it’s “more important than ever” to ensure U.S. policy on digital currencies protects “financial privacy, maintains the dollar’s dominance, and cultivates innovation.”
It remains to be seen whether Texas’ proposal will gain traction and, if it does, how the wider digital currency community will receive it.
Also Read: Arkansas Passes Bitcoin Mining Bill to Safeguard Miners
