Two Texas lawmakers have introduced identical bills for creating a state-based digital currency backed by gold, a move that comes despite objections from several United States lawmakers against introducing a central bank digital currency (CBDC).
Senator Bryan Hughes introduced Senate Bill 2334 on March 10, with Representative Mark Dorazio introducing House Bill 4903 on the same day, stating that a fractional equivalent amount of physical gold would back the proposed digital currency.
“Each unit of the digital currency issued represents a particular fraction of a troy ounce of gold held in trust,” the bills stated.
The bill explains that once a person purchases a certain amount of digital currency, the comptroller would use that 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 received from the purchaser.
The value of a unit of digital currency must be equal to the value of the appropriate fraction of a troy ounce of gold at the time of the transaction.
“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.
It was added that a fee might be established “at any rate necessary” to cover the costs of administering this chapter.
Although neither of the bills has been passed or presented for a vote, both state that this act will take “effect September 1, 2023.”
Several United States lawmakers have recently argued against the U.S. introducing a CBDC.
Florida Governor Ron DeSantis stated in a March 20 press conference that CBDCs would grant “more power” to the government, adding that it provides the government “with a direct view of all consumer activities.”
Meanwhile, on March 21, Republican Senator Ted Cruz 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.”