Legislators in Texas are leading the charge against the Federal Reserve’s monopoly on fiat money by offering an option for people to conduct business in sound money. The principal idea reverses Gresham’s Law, where good money drives bad money out of circulation and the people can choose to decline to accept less valuable fiat money from the Fed.
The bill has the bipartisan support of 42 sponsors to create a viable gold-backed alternative to a central bank digital currency (CBDC) already in development by the Federal Reserve.
If the bill becomes law, it would require the state comptroller to establish and provide for :
- The issuance of gold and silver specie – A specie is a physical coin or token, typically made from a precious metal that is suitable for or customarily used as currency.
- Require the comptroller to authorize the Texas Bullion Depository as issuer of the specie as legal tender in payment of debt and readily transfer the specie to another person
- A mechanism to use 100% backed gold and silver digital currencies in everyday transactions
- Use the digital currency as legal tender in payment of debt.
- By electronic means readily transfer or assign the digital currency to another person.
Physical gold and silver backing the digital currency would be stored in a pooled account at the Texas State Bullion Depository.
Federal lawmakers from Texas are also leading the charge against the Federal Reserve issuing a consumer CBDC. In March, Senator Ted Cruz introduced legislation specifically aimed at preventing the Fed from establishing a central bank digital currency.