The Texas House committee has started discussing a bill that proposes the creation of a digital currency backed entirely by gold. If enacted, the bill will establish an electronic transaction system for this digital currency, enabling users to make payments and redeem the gold specie or supporting coins.
Bill advances with strong sponsorship
Introduced by Representative Mark Dorazio on March 10, the bill, known as HB4903, has received the backing of 42 sponsors and is now under review by the House State Affairs Committee. If the bill passes the committee, the Texas House will vote on it. The proposed legislation outlines that the state’s comptroller would be responsible for creating a digital currency backed by gold. Each issued digital currency unit represents a fraction of a troy ounce of gold held in trust.
Gold custody and redemption provisions
Under the bill’s current version, the Texas state comptroller would oversee gold custody, though the option exists for assigning a third party to manage it. The same amount of gold as the digital currency issuance must be maintained, making it a 100% gold-backed currency. The state comptroller or a contracted third party would handle redemptions in gold specie or money.
The estimated cost of implementing a limited system for the gold-backed digital currency is $25 million, while a more functional transaction system could cost up to $100 million. Despite these costs, the bill has garnered significant grassroots support, as evidenced by a 78-page document submitted on April 26, signed by numerous Texans advocating for the approval of this sound money legislation.
Several other states are also exploring legislation to establish alternatives to the U.S. dollar as a transactional and reserve currency.
Arkansas recently passed a bill legalizing gold and silver as legal tender, allowing citizens to use gold specie to pay debts and obligations without tax implications. Twenty-three additional states are currently considering similar legislation.