Texas Proposes Gold-Backed Digital Currency

April 11, 2023 13984 view(s)

On March 10, 2023, bills were introduced in the Texas Senate and House to create a state-issued, gold-backed digital currency. Sen Bryan Hughes (R) introduced Senate Bill 234, and Rep Mark Dorazio (R) introduced a companion bill, House Bill 4903 requiring the state comptroller to establish a digital currency fully backed by gold.

The comptroller would be required to create a mechanism to use the fully gold-backed digital currency for everyday transactions and be fully redeemable for gold or cash. The digital currency would be backed by a fraction of a Troy ounce of gold stored in a trust at the Texas Bullion Depository. The Texas Bullion Depository is overseen by the Texas Comptroller and operated by the parent company of the U.S. Gold Bureau. The parent company of the U.S. Gold Bureau, Lonestar Tangible Assets, was handpicked over 300+ other companies by the Republic of Texas to run and operate the Texas Bullion Depository. Texas will store the gold at the Texas Bullion Depository, which is the Fort Knox of the South. Speak to your representative about safely keeping your precious metals at the Texas Bullion Depository.

The bills were crafted with protective language to ensure the currency would not be abused or debased. For example, gold must be purchased whenever someone buys the currency. "On receiving payment for a purchase of the digital currency together with any fee charged under Section 404A.0058, the comptroller shall: using the money received from the purchaser, buy a fractional number of troy ounces of gold equal to the number of units of the digital currency issued to the purchaser." The bills also require the trust hold "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 bills clearly state that the legislators cannot use funds to purchase the gold-backed digital currency for other purposes.

Sec. 404A.0057 of the Senate bill states, “Certain money and deposits held in trust are not subject to legislative appropriations. Money received from the purchase of the digital currency under Section 404.0053(a), gold purchased and held under this chapter, and money received from the sale of gold in response to a request for redemption under Section 404.0054 is held in trust by the comptroller as trustee or a person appointed by the comptroller to serve as trustee for purposes of this chapter outside the state treasury on behalf of persons who hold the digital currency; and NOT AVAILABLE FOR LEGISLATIVE APPROPRIATION (emphasis added).

What does it mean?

There have been many fiat currencies throughout history, but they all end the same way. The currency collapses, and the people return to sound monetary policies and precious metals. The Texas legislation is designed to create a sound money alternative to the Federal Reserve’s digital currency currently being developed. More and more Americans are realizing there is a problem with the Dollar and looking for a trustworthy alternative. Over the last decade, thirteen other states have also taken steps to create state-issued, gold-backed currencies. (Private cryptocurrencies have tried to accomplish the same, but with a significant design flaw.)

Mistrust of the Federal Reserve is not a new phenomenon. On June 10, 1932, former Chairman of the U.S House Committee on Banking and Currency, Rep Louis T. McFadden (R-Pa), said about the Federal Reserve, “one of the most corrupt institutions the world has ever known, that, has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted the government.” McFadden called for an audit of the Federal Reserve and was scorned and ridiculed by his contemporaries. Nearly 100 years later, McFadden’s complaints remain valid. Over the last fifty years, there have been several calls to audit the Federal Reserve. Still, proponents are labeled conspiracy theorists, extremists, and crazy people.

It is not just Texans wanting a gold-backed alternative to the Dollar. China and the other members of the BRICS (Brazil, Russia, India, China, and South Africa) are building a commodity-backed basket of currencies to compete with the Dollar. China and Russia have been stockpiling gold for decades. Central banks bought record amounts of gold in 2022. Everyone should ask, "What do they know?" and "Why now?"

The Texan bills have yet to go to the committee, but the stated effective dates are September 1, 2023. If the bills pass, the Republic of Texas will probably face a legal challenge from the federal government. However, the Republic of Texas is thinking about its future and creating a plan to survive the collapse of the Dollar.