By George WardThe Texas House of Representatives has made substantial progress in passing proposed legislation that could authorize the creation of a digital currency fully backed by gold, exclusively in Texas. The proposed bill, pending a vote by the House, aims to establish an electronic platform that would enable users to transact based on the proposed digital currency bill.
Texas Eyes Gold-Backed Digital Asset
Despite opposition from some US lawmakers over introducing a central bank digital currency (CBDC), its legislative progression hasn’t stopped. Representative Mark Dorazio put forward the HB4903 bill to the House on March 10.
So far, the bill has attracted the backing of 43 sponsors and is now slated to undergo a voting process in the House. According to the proposed Texas bill, the state comptroller would be mandated to develop a highly transferable digital currency fully supported by gold.
Each unit of the asset would symbolize a distinct portion of a troy ounce of gold that is kept in trust. Moreover, another provision of the bill is the directive for the comptroller to develop a digital mechanism that enables individuals holding gold-supported digital currency to transfer it to other persons electronically.
A fiscal memorandum dated April 25, 2023, estimated the cost of procuring the services of a third-party contractor to establish the digital currency and user-focused platform to be around $25 million. However, the document added that the platform will still have limited features.
In contrast, the budget required to implement high-tech infrastructure and comprehensive functionality for the digital currency platform could rise to $100 million. On April 26, the State Affairs committee reviewed a replacement for the bill based on a comprehensive 78-page dossier of public responses submitted to the committee.
Nevertheless, the proposed digital currency bill has garnered significant support throughout Texas. The House committee released a favorable report on May 2 regarding the substituted version of the bill, implying that the committee proposes the passage of the statement by the House.
A Progression of Crypto Regulations
The Texas State Legislature has implemented various measures to harness cryptocurrencies and associated technologies while safeguarding its citizens’ well-being, with the “HB4903” bill being one such measure. Texas’s legislative body has been quite active in the last few weeks in enacting cryptocurrency regulations.
A bill dubbed HB1666, passed by the State House of Representatives on April 20, 2023, mandated that crypto exchanges provide complete client transparency and security. Also, the “Proof of Reserves” bill requires crypto exchanges to maintain reserves “sufficient to fulfill all customer obligations.”
Before the “Proof of Reserves” bill, the Texas State Senate passed a bill aimed at removing incentives for local crypto miners on April 12 during its session on the floor of the State Senate. Considering the difference of opinion regarding the use of CBDC in the United States, the Texas legislature has taken an ambitious route toward implementing gold-backed digital tokens within its jurisdiction.