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Texas Latest to Mull Gold-Backed Digital Currency

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Texas is one step closer to launching a digital currency backed entirely by gold.

The gold-backed digital currency bill (HB4903) was introduced to the House on March 10 by Representative Mark Dorazio. It has already garnered the support of 43 sponsors and was considered in a formal meeting on Tuesday. A public hearing will now take place on Monday.

Back to the Gold Standard

The bill would require the state to establish a readily transferable gold-backed digital currency and would authorize it to contract a private company to do so.

Upon establishment of the new digital currency, the state would be required to hold a certain amount of Gold. The amount of gold held will be equivalent to that needed to redeem any digital tokens issued.

The bill would authorize the state to establish a fee for the issuance or redemption of digital currency at a rate necessary to cover administrative and storage costs.

The Rise of Gold-Backed Digital Assets

Interestingly, the Texas House is not the first authority to consider such an idea.

Already, the Central Bank of Zimbabwe (CBZ) is making preparations to launch its own gold-backed digital currency. It has been argued that such a move will help to stabilize the Zimbabwe dollar.

It will also give residents access to a less volatile asset. The CBZ hopes this will help Zimbabweans hedge against runaway inflation.

But why the sudden interest in digital gold?

In one sense, moves by the likes of Zimbabwe and Texas are concordant with a role that governments and central banks have long fulfilled.

Gold is often perceived as the ultimate safe investment. And for those looking for exposure to precious metals, gold coins offer an easy way in via a trusted source.

Furthermore, just like gold coins provide a way to invest in gold without the high price barriers

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Author: James Morales

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