- The statute mandates that all reserves be backed 1:1 by gold.
- The comptroller must purchase an equal quantity of gold (measured in troy ounces).
Texas wants a digital currency that can be traded for gold and cash, while other US authorities have proposed introducing a Central Bank Digital Currency (CBDC) managed by the Federal Reserve, which could be manipulated in the same ways as the dollar.
Senator Bryan Hughes submitted Senate Bill 2334, and Representative Mark Dorazio offered House Bill 4903, the first proposal for a state currency not backed by the dollar but by gold.
Republican Senator Bryen Hughes introduced Senate Bill 2334, proposing that the Texas Comptroller issue digital currency with a value equal to a fraction of a troy ounce of gold. The controller must also make it possible for users of any payment system to freely transfer or assign their digital money to other users.
Robust Backing of Gold
As a fiduciary for all digital currency holders, the comptroller will store adequate gold to ensure a gold settlement for all units of the digital currency that have been granted and are not yet returned for money or gold.
The statute mandates that all reserves be backed 1:1 by gold. Legislators have enacted safeguards to prevent the manipulation of the digital currency’s liquidity. Although buyers have no limits, the comptroller must purchase an equal quantity of gold (measured in troy ounces) to back the digital money and prevent price fluctuations.
This means that the controller or designated company must have sufficient cash on hand to cover the funds if a buyer wishes to sell their coins. Coins may be converted into tiny gold coins or huge gold bars at any official agency, for individuals who prefer the latter.
