Quote:

---

Enactment of this legislation would create an option for people to transact business in sound money, set the stage to undermine the Federal Reserve's monopoly on money and create a viable alternative to a central bank digital currency (CBDC).

Sen. Bryan Hughes (R) introduced Senate Bill 2334 (SB2334) on March 10. Rep. Mark Dorazio (R) introduced a companion, House Bill 4903 (HB4903) on the same day.

The legislation would require the state comptroller to establish a digital currency that is fully backed by gold and fully redeemable in cash or gold as well. The comptroller would also be required to create a mechanism to use this gold-backed digital currency in everyday transactions.

Quote:

---

"In establishing the digital currency the comptroller shall establish a means to ensure that a person who holds the digital currency may readily transfer or assign the digital currency to any other person by electronic means."

---

The state of Texas would hold gold backing the currency in trust on behalf of the digital currency holders.

Quote:

---

"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."

---

In practice, individuals would be able to purchase digital currency from the state. The state would then use the money to purchase gold that would be held in the Texas Bullion Depository or another secure vault. Individuals would be able to redeem their digital currency for dollars or gold.

The creation of a state-issued gold-backed digital currency would create currency competition with Federal Reserve notes and undermine the Fed's monopoly on money. It would also provide an alternative if the Federal Reserve implements a central bank digital currency.

Broadly speaking, by making gold conveniently available for regular, daily transactions by the general public, gold-backed digital currency would create the potential for a wide-reaching effect. Professor William Greene, an expert on constitutional tender, said in a paper for the Mises Institute that when people in multiple states actually start using gold instead of Federal Reserve notes, it would effectively nullify the Federal Reserve and end the federal government's monopoly on money.

Quote:

---

"Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a 'reverse Gresham's Law' effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes).

"As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state's treasury, an influx of banking business from outside of the state as people in other states carry out their desire to bank with sound money and an eventual outcry against the use of Federal Reserve notes for any transactions."

---

Gresham's Law holds that "bad money drives out good." For example, when the U.S. government replaced silver quarters and dimes with coins made primarily of less valuable copper, the cheap coins drove the silver out of circulation. People hoarded the more valuable silver coins and spent the less valuable copper money. So, how do you reverse Gresham?

https://www.zerohedge.com/markets/texas-bill-would-create-state-issued-gold-backed-digital-currency

---

When Texas secedes I'm all for it but in the meantime this isn't going to happen.

Gold backed?
Why not just use gold then?

TxTarpon said:

---

Gold backed?
Why not just use gold then?

---

Because then the government couldn't control it

MROD92 said:

---

TxTarpon said:

---

Gold backed?
Why not just use gold then?

---

Because then the government couldn't control it

---

This right here. I guess this is better than having the Fed (which is a private bank) issue a CBDC. We need to ensure that any CBDC issued by the state or otherwise are non programable.

TxTarpon said:

---

Gold backed?
Why not just use gold then?

---

It's not efficient or practical whatsoever.

The challenge here would be how they control the digital currency against it. Are they going to strictly adhere to the gold tie or are they going to let it float and then inflate it like what happened the last time we did this.

1. Don't like the idea of Texas having a digital currency anymore than the Fed

2. I thought it was illegal for any state to create their own currency?

It would be an interesting constitutional argument.

Quote:

---

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;

---

While the states are not legally allowed to "coin money" it is supposedly just exchanging gold in digital format. It's not like years down the road you would take a gold backed currency and just drop the precious metal being held as collateral. Luckily Texas politicians have a solid track record on keeping their word, I'm so glad my school taxes are so low thanks to the Texas Lottery.

MROD92 said:

---

TxTarpon said:

---

Gold backed?
Why not just use gold then?

---

Because then the government couldn't control it

---

Can you do this with digital?
I think not.

CDUB98 said:

---

1. Don't like the idea of Texas having a digital currency anymore than the Fed

2. I thought it was illegal for any state to create their own currency?

---

I don't like digital currency either but it seems unlikely we avoid the use of it. We need to make damn sure its not programmable and that each citizen controls their own wallet.

Had no clue Texas had that much gold stashed away. Kinda like most Texans have no clue how much money the State of Texas had stashed for its " Rainy Day Fund". Last I checked it was around 13 lots of zeros.

Seems to me the only people to benefit from this would be those who convert between dollars and the digital currency. Money changers and all.

Hard ass no to any digital currency

Send this peasant to the gulag.

TxTarpon said:

---

Gold backed?
Why not just use gold then?

---

Would you accept gold coins, ingots, or bars as payment from me or any stranger that wanted to pay in "gold"?

MROD92 said:

---

TxTarpon said:

---

Gold backed?
Why not just use gold then?

---

Because then the government couldn't control it

---

I'm not saying you're wrong. But physically lugging gold around or trying to send it by mail to pay for things would get really tiresome.

I am always wrong said:

---

MROD92 said:

---

TxTarpon said:

---

Gold backed?
Why not just use gold then?

---

Because then the government couldn't control it

---

I'm not saying you're wrong. But physically lugging gold around or trying to send it by mail to pay for things would get really tiresome.

---

Self-custodying of gold is exceptionally difficult, depending on scale, agreed.

Other technologies, not so much.

Can anyone prove the exact amount of gold pulled out of the ground, counterfeit gold in storage, and quantity of gold in ground? If not, how does supply/potential supply vs demand function, or do we just shut up and trust the authorities?

Adverse Event said:

---

I am always wrong said:

---

MROD92 said:

---

TxTarpon said:

---

Gold backed?
Why not just use gold then?

---

Because then the government couldn't control it

---

I'm not saying you're wrong. But physically lugging gold around or trying to send it by mail to pay for things would get really tiresome.

---

Self-custodying of gold is exceptionally difficult, depending on scale, agreed.

Other technologies, not so much.

Can anyone prove the exact amount of gold pulled out of the ground, counterfeit gold in storage, and quantity of gold in ground? If not, how does supply/potential supply vs demand function, or do we just shut up and trust the authorities?

---

I think that is what we have been doing.

aggie93 said:

---

When Texas secedes I'm all for it but in the meantime this isn't going to happen.

---

Secession is as likely to happen as this. Legislature needs to quit goofing around and make some meaningful decisions. They already choked on the vouchers.

BluHorseShu said:

---

aggie93 said:

---

When Texas secedes I'm all for it but in the meantime this isn't going to happen.

---

Secession is as likely to happen as this. Legislature needs to quit goofing around and make some meaningful decisions. They already choked on the vouchers.

---

So, greater than or less than 5% chance to happen?

And it's value would be measured in dollars

Why a digital currency when you can trade in small gold and silver coins or a hard paper currency backed by oil and a basket of agricultural commodities?

Fun fact, we have never mined more gold in the world in a single year than last year. We continue to produce more than we ever have before every single year that passes.

Definitely Not A Cop said:

---

Fun fact, we have never mined more gold in the world in a single year than last year. We continue to produce more than we ever have before every single year that passes.

---

is China reporting their PM's accurately?

UTExan said:

---

Why a digital currency when you can trade in small gold and silver coins or a hard paper currency backed by oil and a basket of agricultural commodities?

---

Are you talking about abandoning the entire digital payment infrastructure then? Which means no more online payments and no point of sale card transactions?

I'm guessing those account for the vast majority of transactions. Would be 99.9% in my case.

aggie93 said:

---

When Texas secedes I'm all for it but in the meantime this isn't going to happen.

---

This is part of the prep work to secede!