A gold-backed digital currency has been suggested by Texas lawmakers, which might shake up the cryptoverse. In an audacious attempt, similar proposals have been presented to create a state-backed crypto asset backed by gold.Â
However, the concept has aroused worries because certain US politicians remain opposed to the adoption of a central bank digital currency. (CBDC). Sen. Bryan Hughes and Rep. Mark Dorazio introduced Senate Bill 2334 and House Bill 4903, respectively, on March 10, arguing for a digital currency backed by a fractional equivalent amount of solid gold.
According to the idea, the comptroller must produce a digital currency that equals a specific percentage of a troy ounce of gold held in trust for each unit of money created. The plan requires the comptroller to make it simple for holders of digital money to transfer or assign it to others via any payment mechanism. Furthermore, the comptroller is to operate as a trustee and fiduciary, mandated to keep enough gold on hand to assure the redemption of any unredeemed digital currency units for money or gold.
The bills discuss the potential of imposing a fee at a rate determined to be required to cover the costs of administering this chapter. Despite the fact that neither measure has been enacted or put to a vote, they both state that the act will go into effect on September 1, 2023.
Texas is currently advocating for the approval of projects that will return the state to the gold standard. Before being granted formal law status and getting State Senate and House approval, these proposals must first go through committee hearings.
The reinstatement of the gold standard in Texas indicates the state’s desire to enhance the US economy and trade, as it has done in the past. Despite the fact that the digital dollar has yet to be established, Miami and New York have begun testing the issuing of their official tokens. Despite criticism from some lawmakers, this move indicates that the US government is investigating the potential of a government-backed digital currency.
Several US legislators have recently spoken out against the introduction of a CBDC. Republican Senator Ted Cruz presented legislation to prevent the Federal Reserve from launching a “direct-to-consumer” CBDC. Meanwhile, in a news conference, Florida Governor Ron DeSantis cautioned that CBDCs will give the government additional power, allowing authorities to directly monitor consumer activity.
