Published 7 April 2023 at 15.05
Economics. The US state of Texas is about to introduce its own digital currency backed entirely by physical gold, reports Kitco News.
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Republican members of the state Senate are behind the proposal, which is supposed to protect residents against inflation.
The plan is to establish a new digital currency that is fully backed by gold and fully redeemable in either cash or physical gold.< /p>
Each unit of the issued digital currency shall represent a certain fraction of an ounce of gold. A mechanism will also be created to allow the new gold-based digital currency to be used by Texas residents in their daily transactions, according to the proposal.
The gold reserve backing the digital currency is planned to be held at Texas Bullion Depository. This reserve must be large enough that all units of the currency can be exchanged for physical gold at any time.
The more units of the currency that are purchased, the more gold must be kept in the reserve, so that the digital money is fully time has the full backing of the gold.
If someone who holds the digital currency instead wants to redeem their holding for cash, gold for an equivalent value must be sold.
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