Texas Lawmakers Push for Gold-Backed Digital Currency Amid CBDC Controversy

Two Bills with One Gold-Backed Vision

In a bold move supported by both sides of the aisle—or at least the Texas aisle—Senator Bryan Hughes and Representative Mark Dorazio have launched identical bills aimed at creating a shiny new digital currency that’s backed by none other than gold. On March 10, 2023, both lawmakers introduced Senate Bill 2334 and House Bill 4903, respectively, generating quite the chatter, especially from skeptics of a central bank digital currency (CBDC).

How Does It Work?

So, you might be wondering, what does it mean for a digital currency to be backed by gold? The bills state that each unit of this new currency will represent a specific fraction of a troy ounce of physical gold stashed away safely. Here’s how it goes down:

• When a person buys a digital currency, the comptroller takes the funds and buys an equivalent amount of gold.
• The buyer receives digital currency equal in value to the gold the comptroller has just procured.
• The value will fluctuate based on the current market price of gold, keeping things as shiny as a well-polished penny.

The Fine Print: Trust and Fees

Of course, every shiny object has its scratches. The bills also note that a “trustee” must keep enough gold to redeem all issued digital currency that’s still floating around, waiting for someone to cash it in. Additionally, a fee might be imposed “at any rate necessary” to help cover the costs of managing this whole deal. Let’s just say, attention to detail here is key!

The Clock is Ticking

Now, before you rush out to invest in gold-plated technology, it’s important to recognize that these bills haven’t officially passed or been voted on yet. If all goes according to plan, however, this act is expected to come into play by September 1, 2023. Mark your calendars, folks!

Pushback on CBDCs: A Broader Debate

While Texas is leaning towards gold as the answer to the digital currency conundrum, plenty of lawmakers across the U.S. are throwing shade on the CBDC concept. Florida Governor Ron DeSantis, in a press conference, declared that it would grant undue power to the government, effectively granting them a magnifying glass into every consumer’s spending habits. Talk about big brother vibes!

Meanwhile, Senator Ted Cruz is on a mission, proposing a bill aimed at preventing the Federal Reserve from launching a “direct-to-consumer” CBDC, urging that financial privacy is paramount. It seems like while the Texas bills are sparking hope for some, there’s a whole army of lawmakers standing guard against potential government overreach in digital currencies.