According to these bills, the responsible person or organization must maintain sufficient gold reserves for all digital currency units issued and in circulation. That is, in case of any problems with the digital currency, the value of the currencies will be protected by using the gold reserves corresponding to the digital currency.
Government digital currency that will be equivalent to gold
In Texas, two lawmakers have introduced similar bills to create a state digital currency that would be equivalent to gold. This move to create a gold-backed state-based digital currency was taken despite objections from some United States lawmakers to introduce a central bank digital currency (CBDC). So, the goal is to create a gold-backed digital currency in Texas, but the idea of creating a central bank digital currency across the US is opposed by some lawmakers.
Senator Bryan Hughes introduced Senate Bill 2334 on March 10, while Representative Mark Dorazio introduced House Bill 4903 the same day, stating that a fractional equivalent amount of physical gold would support the proposed digital currency.
“The bills state that each unit of digital currency issued represents a specified fraction of a troy ounce of gold held in trust.” That is, the digital currency is designed to be backed by a certain physical gold reserve, with each unit corresponding to a certain fraction of the gold reserve.
The bill explains that when a person purchases a certain amount of digital currency, the auditor will use that money to purchase an equivalent amount of gold.
The purchaser then receives digital currency equal to the amount of gold the auditor purchased with the money he received from the purchaser.
The value of a unit of digital currency must be equal to the value of one appropriately fractional troy ounce of gold at the time the transaction is made.
“The defined amount of gold shall be maintained to be sufficient for the gold equivalent of all digital currency units that have been issued and have not yet been redeemed for money or gold,” the bill states. The statement is included.
This statement states that when a certain amount of digital currencies is issued, the amount of gold corresponding to each unit of digital currencies issued must be kept as a reserve. This way, when digital currency holders want to claim gold, there will be sufficient gold reserves so that all issued digital currencies can be bought back in gold.
It added that fees could be set at "any necessary rate" to cover the costs of administering this department.
Although neither bill has been passed or put to a vote, both MPs state that this law "will come into force on September 1, 2023."
Recently, many United States lawmakers have opposed the United States issuing a central bank digital currency (CBDC).
Florida Governor Ron DeSantis stated at a press conference on March 20 that CBDCs would give the government “more power,” adding that it gives the government “a direct view into all consumer activity.”
At the same time, Republican Senator Ted Cruz introduced a bill to block the Fed from launching a "direct-to-consumer" CBDC, stating that it is "more important than ever" to make sure digital currencies policy protects financial privacy, maintains the dominance of the dollar, and encourages innovation .
