Republican politicians from Texas, Senator Bryan Hughes and Representative Mark Dorazio, have recently introduced a bill proposing the creation of a state digital currency backed by gold.
The proposed stablecoin will not be tied to the US dollar but to a fraction of a troy ounce of gold held in trust by the Texas financial regulator.
The regulator must maintain a sufficient amount of gold reserves to fully back the issued stablecoins.
The bill also requires the regulator to ensure easy transferability and money transfers for holders of the digital currency through any payment system.
Moreover, coin holders can exchange their stablecoins for physical gold coins or bars and cash through authorized agents.
The legislators’ objective is to launch a gold-backed stablecoin in the state, not a digital dollar controlled by the US Federal Reserve System (FRS).
They believe that returning to the “gold standard” would better support the US economy and trade.
Many senators oppose the creation of a central bank digital currency because they fear it could be used to monitor citizens’ financial transactions and hinder the adoption of cryptocurrencies such as bitcoin. Texas Senator Ted Cruz shares this view.