Texas lawmakers have proposed the creation of a digital currency backed by gold, according to a report from Cointelegraph.
The bills were introduced in the state House and Senate in March and aim to establish a system that would allow individuals to avoid using central bank digital currencies (CBDCs).
The proposed digital currency would be unique in that it would be based on a physical asset, unlike the US dollar and most cryptocurrencies.
The bills require the Texas comptroller, who oversees and manages the financial operations, to “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 gold would be stored in the Texas Bullion Depository.
Each purchaser of the digital currency would receive an equivalent amount of gold that the comptroller purchases with the purchaser’s money.
The value of the digital currency must be equal to the value of the appropriate fraction of a troy ounce of gold at the time of the transaction, according to Cointelegraph.
The trustee is required to 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 were introduced by Senator Bryan Hughes and Representative Mark Dorazio, both Republicans.
Although neither bill has been passed or presented for a vote, both state that the act will take effect on September 1, 2023.
The proposed Texas system would give people an alternative to CBDCs, which the Federal Reserve may be considering.
If the bills are passed, Texas would become the first U.S. state to create a digital currency backed by gold.
The bills also state that a fee may be established “at any rate necessary” to cover the costs of administering this chapter.
