The Texas House of Representatives has made significant headway in approving a bill that would allow the issuance of a 100% gold-backed digital currency in the state. This bill, which is yet to be voted on by the House, would authorize the development of an electronic system for users to utilize this digital currency and would also allow users to redeem the currency for money or the equivalent value of gold.
This legislative advancement would come despite criticisms from several United States legislators against the introduction of a central bank digital currency (CBDC).
Texas House Committee Passes Digital Currency Bill
A Texas House committee has taken crucial steps in the authorization of a bill that looks to create a gold-backed digital currency. The bill, codenamed HB4903, was presented to the House by Representative Mark Dorazio on March 10. Having garnered the support of 43 sponsors, the bill is set to be voted on in the House.
This Texas bill would require the state comptroller to create a readily transferable gold-backed digital currency. It states that “each unit of this digital currency would represent a particular fraction of a troy ounce of gold held in trust”. The bill also requires the comptroller to establish an electronic means for a person who holds the gold-backed digital currency to transfer it to another individual.
A fiscal note dated April 25, 2023, reveals that the funds needed to contract with a third-party vendor to establish the digital currency and a user-driven platform – with limited functionality – stands at about $25 million. The cost for high-end technology and full functionality, on the other hand, could be up to $100 million.
A substitute for the bill was considered in the State Affairs committee on April 26th. According to a 78-page compilation of public comments submitted to the committee, the digital currency bill appears to have widespread support in Texas. On the 2nd of May, the House committee reported favorably as substituted, meaning that the committee recommends that the House passes the bill.
Texas’ Recent History Of Crypto Bills
The “HB4903” bill is only one of the numerous actions taken by the Texas State Legislature to leverage cryptocurrency and related technology, while protecting its citizens. In the past few weeks, Texas’s legislative arm has been pretty proactive concerning crypto regulation in the state.
On April 20, 2023, the State House of Representatives passed a bill – designated HB1666, which demands that crypto exchanges provide full transparency and protection to their customers. This bill, dubbed “Proof of Reserves”, requires that crypto exchanges maintain reserves “in an amount sufficient to fulfill all obligations to customers”.
The “Proof of Reserves” bill was preceded by a Senate bill aimed at removing incentives for local crypto miners. This bill was passed on the floor of the Texas State Senate on April 12.
Total Crypto Market Cap @ $1.168 trillion | Source: Crypto Market Cap Chart on TradingView