Texas moves to create gold-backed digital currency

> No State shall .. make any Thing but gold and silver Coin a Tender in Payment of Debts

  the legislators are looking to require the state comptroller to establish a digital currency that is fully backed by gold and fully redeemable in cash or gold.

The U.S. UCC (Uniform Commercial Code) was modified in July 2022 to recognize CERs (controllable electronic records), a flexible definition that may encompass current and future digital currencies. It's now up to individual U.S. states to ratify the proposed UCC changes in state legislation, https://www.clearygottlieb.com//news-and-insights/publicatio...

> Control under Article 12 is designed to be a technology-neutral functional equivalent of “possession.” It generally encompasses circumstances when a party has the “private key” or other mechanism to avail itself of substantially all of the benefits of the record, prevent others from availing themselves of such benefits, and transfer the record and associated benefits.

I suspect there are three flavours of gold bugs:

1) Wealthy + Paranoid + Stupid. They'd rather keep their money in sovereigns under their mattress, than put it into any sort of productive economic activity. On a long term, especially in the US, you could pretty much throw darts and build a portfolio that competes with, or beats, inflation.

2) Conspirational: "fiat currency is a grand scheme to undermine our savings for (insert nefarious bugaboo of the day)"

3) Arguably a subset of 2) but Apocalypse Enthusiast. "When civilization crumbles, the obvious trade unit won't be something like grain, alcohol, or bullets, but my bags full of low-grade silver dimes! I'll be King of the Wasteland!"

> When someone holding the digital currency wants to redeem it for cash, all they would need to do is present it to the comptroller or a designated agent, who will then sell gold held in the depository account equal to the redemption amount and transfer the funds to the redeemer, minus any fees.

> The value of each unit of the digital currency will be determined at the time of a transaction and “must be equal to the value of the appropriate fraction of a troy ounce of gold at the time of that transaction.”

If this were actually put into effect, expect intense interest from current long-term owners of gold ETFs e.g. GLD. GLD steadily declines relative to spot bullion, as a means of charging to holders expenses of storage, security and management. The Texas proposal would apparently cover such costs entirely with fees on exchange transactions, making long-term holders something like free riders on the system.

Gold coins are beautiful liquid assets. Why not keep part of your retirement or emergency fund in gold and silver? I can just go down to one of many local coin stores and sell them if I need the cash.