Precious Metal-Backed Crypto Introduced
Texas House Bills 1049 and 1056 would bridge the gap between tradition and innovation; the new cryptocurrency would be backed by precious metals, promising stability in a volatile digital market.
Perhaps not all is lost. Fiat money appears to rule the financial world until it doesn’t. Not only is unbacked currency used daily as money, but there are now cryptocurrencies, which are not only unbacked but are not a currency, nor do they go through any central clearing site or bank to ensure their stability. If fiat money is viable, why do central banks worldwide continue to hoard and actively buy gold?
Why, in times of financial distress, do even everyday consumers look to gold or silver as has been done for thousands of years? Precious metal money is tangible. Fiat money and cryptocurrencies are not. Texas is looking to change all this. The state legislature recently introduced House Bill 1049 and House Bill 1056, through which a state-backed digital currency would be fully redeemable in gold and silver. This currency would be backed by precious metal physically stored through the Texas Bullion Depository.
Should this succeed, Texas will have the best of all worlds—a digital currency directly tied to precious metals, offering an alternative to our fiat money Federal Reserve bank notes. According to the legislation, “each unit of the digital currency issued represents a particular fraction of a troy ounce of gold held in trust.”
Perhaps this could become a numismatic collectible. What impact will this have on U.S.-issued American Eagle bullion coins? What impact will it have on intrinsic-value-impacted collectible coins? Specie is apparently not dead. It could be interesting to see how this plays out and how it influences precious metal collectible coins.
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