OK but if they actually have a piece of physical silver and gold for each money, then why not just let us trade in silver and gold? Why does Texas want possession of the physical gold and we get proxies? Something about putting eggs in one basket...
According to the article, you can redeem the crypto for gold (or money).
then why not just let us trade in silver and gold?
I don't think there's a law against trading in silver and gold.
I think the problem is that they'd have to buy the gold/silver and start minting coins, then put the coins in circulation. Not necessarily a tough thing, but it's easier to set up the crypto blockchain and then, if you want the physical gold, you can redeem it.
BTW I'm not saying your concerns aren't valid, I'm just offering what I think is the answer to your questions. Personally, I would love for a crypto expert to read through the bill and explain everything and give their thoughts.
no law against trading, but U.S. Citizens became limited in how much they can possess when the fed was created. i believe those limits are still in place.
So it is coin and digital. “The legislation would require the state comptroller to establish and provide for the issuance of gold and silver specie and also establish digital currencies that are 100% backed by gold and silver, and 100% redeemable in cash, gold, or silver.”
The specie are coins / physical money. I think the digital part of the bill is so that it is in agreement with the constitution. The constitution says only gold and silver backed currency in states can be created.
Also have you ever looked up how much gold and silver is actually in the world? There isn’t enough to make money out of it. The coins would be tiny. To have larger bills or coins represent it which can be redeemed would really be the only way. The price of gold and silver would most likely go extremely high when this happens.... In perspective it is said that there is only enough silver in the world for each person to have one silver dollar size coin. Gold is even less. The only reason silver and gold prices aren’t even more high then they are I believe is because the average person doesn’t care and will pay money for costume jewelry and such.... I think this is exciting and could be great.
You can already open an account at the Texas Bullion Depository, buy gold online, and have it shipped there. You pay storage fees. The digital currency looks to me like a way to make these deposits more liquid, so you can spend your gold.
As long as it’s fully backed and redeemable, it seems good to me, but could also be a stepping stone to a surveillance digital currency. The devil is in the details. Will the digital currency be permissionless or private? Can addresses be sanctioned?
Also interesting- the branding of bitcoin as “digital gold” seems to pave the way for this currency
As long as it’s fully backed and redeemable, it seems good to me, but could also be a stepping stone to a surveillance digital currency. The devil is in the details. Will the digital currency be permissionless or private? Can addresses be sanctioned?
Yeah, this is the key for me, especially whether it can be withheld for having the wrong opinions.
What happened with paper (or plastic?) money with thin golden threads/particles in them issued in one of US states?
At least that was a kind of decent idea, when people really have gold they own in their hands.
As for that "backed by gold" something, there is a catch - to make it really work, they have to somehow allow every single user to easily check in person that at any give moment amount of gold in government storage is equal to amount in issued notes of any kind.
Otherwise there is no any difference with any other printed money. There always will be too small amount of people who will want to get their physical gold, so they will be able to issue much more notes into circulation than amount of gold they have. Even if those who establish that will be good honest guys, which is already questionable, those who come later could be usual greedy bastards.
That thing with gold backed notes already was the case in the past for nearly any currency in the world and we all know how it ended everywhere. What will prevent the same fate of that Texas new money?
That gold-filled notes I mentioned at the beginning was much more honest and reliable idea of making real sound money.
People could choose to use Bitcoin or Monero. However, constitutionally, Gold and Silver are the only legal tender that states are allowed to mint, if I'm not mistaken. The Texas bill would be constitutional in that sense.
Maybe. The law would require them to purchase that amount of physical gold and store it. That gold could and should be audited. With that said, who knows what could happen one day where they either lie or refuse to be audited, like Fort Knox or the federal reserve. If the law doesn't address this, then yeah, it's flawed.
Something to note is that the Texas bill allowed to redeem the digital currency for gold.
In practice, individuals would be able to purchase digital currency from the state. The state would then use the money to purchase gold that would be held in the Texas Bullion Depository or another secure vault. Individuals would be able to redeem their digital currency for dollars or gold.
If you think it's flawed, I'm interested in your thoughts.
Interesting distinction you're making here. Can you demand gold for these digital coins? Or, is the number of coins limited to the amount of gold they have? If it's the later then this is really no different than instruments such as $GLD
Here's the actual text. It's not a currency. It's a transferable token which grants you the right to a specific weight of gold. These things exist already. Any major gold vendor sells either physical gold or a certificate for a specific amount of gold.
OK but if they actually have a piece of physical silver and gold for each money, then why not just let us trade in silver and gold? Why does Texas want possession of the physical gold and we get proxies? Something about putting eggs in one basket...
According to the article, you can redeem the crypto for gold (or money).
I don't think there's a law against trading in silver and gold.
I think the problem is that they'd have to buy the gold/silver and start minting coins, then put the coins in circulation. Not necessarily a tough thing, but it's easier to set up the crypto blockchain and then, if you want the physical gold, you can redeem it.
BTW I'm not saying your concerns aren't valid, I'm just offering what I think is the answer to your questions. Personally, I would love for a crypto expert to read through the bill and explain everything and give their thoughts.
no law against trading, but U.S. Citizens became limited in how much they can possess when the fed was created. i believe those limits are still in place.
So it is coin and digital. “The legislation would require the state comptroller to establish and provide for the issuance of gold and silver specie and also establish digital currencies that are 100% backed by gold and silver, and 100% redeemable in cash, gold, or silver.” The specie are coins / physical money. I think the digital part of the bill is so that it is in agreement with the constitution. The constitution says only gold and silver backed currency in states can be created.
Also have you ever looked up how much gold and silver is actually in the world? There isn’t enough to make money out of it. The coins would be tiny. To have larger bills or coins represent it which can be redeemed would really be the only way. The price of gold and silver would most likely go extremely high when this happens.... In perspective it is said that there is only enough silver in the world for each person to have one silver dollar size coin. Gold is even less. The only reason silver and gold prices aren’t even more high then they are I believe is because the average person doesn’t care and will pay money for costume jewelry and such.... I think this is exciting and could be great.
So another gateway to digital prison hell. Gotcha
just like he was used to usher in the covid era, Trump's role will be to get conservatives/"the right" to go along with cbdc.
Yeap. We now can see right through the fucker
You'd have to buy the crypto, so you're not required to use it.
And the crypto can be redeemed for gold/silver or money.
My biggest concern would be how it would not be used to prevent us from making purchases and whether purchases would be anonymous.
In the case of anonymity, I guess we'd have to redeem the crypto into gold/silver/money.
You can already open an account at the Texas Bullion Depository, buy gold online, and have it shipped there. You pay storage fees. The digital currency looks to me like a way to make these deposits more liquid, so you can spend your gold.
As long as it’s fully backed and redeemable, it seems good to me, but could also be a stepping stone to a surveillance digital currency. The devil is in the details. Will the digital currency be permissionless or private? Can addresses be sanctioned?
Also interesting- the branding of bitcoin as “digital gold” seems to pave the way for this currency
Interesting, thanks for sharing!
Yeah, this is the key for me, especially whether it can be withheld for having the wrong opinions.
They passed this law in a few other states. Utah being the first I think. People trade in Goldbacks allot there.
My first thought is, "I don't live in Texas."
lol neither do, but it's still interesting and could be adopted in the future by other states or countries.
What happened with paper (or plastic?) money with thin golden threads/particles in them issued in one of US states?
At least that was a kind of decent idea, when people really have gold they own in their hands.
As for that "backed by gold" something, there is a catch - to make it really work, they have to somehow allow every single user to easily check in person that at any give moment amount of gold in government storage is equal to amount in issued notes of any kind.
Otherwise there is no any difference with any other printed money. There always will be too small amount of people who will want to get their physical gold, so they will be able to issue much more notes into circulation than amount of gold they have. Even if those who establish that will be good honest guys, which is already questionable, those who come later could be usual greedy bastards.
That thing with gold backed notes already was the case in the past for nearly any currency in the world and we all know how it ended everywhere. What will prevent the same fate of that Texas new money?
That gold-filled notes I mentioned at the beginning was much more honest and reliable idea of making real sound money.
must .. control .. the goyim! only .. paper .. money we can print any time! must not have ... any backing! money changers angry!
Unconstitutional.
Article 1 Section 8 Clause 5
Article 1 Section 10 Clause 1
Personally, I think it would be a great idea if it wasn't done by the government.
At least it'll be a better store of value than fed bucks, but you should still keep money aside for when you plan to make purchases.
Who else could do it?
People could choose to use Bitcoin or Monero. However, constitutionally, Gold and Silver are the only legal tender that states are allowed to mint, if I'm not mistaken. The Texas bill would be constitutional in that sense.
I wasn't aware the distortion Constitution specified this. The US mint strikes palladium and platinum and zinc coins too fwiw
You are mistaken.
According to the Constitution, only Congress is given this authority. The power is not given to the states.
See Article I, Section 8, Clause 5 then Article I, Section 10, Clause 1.
The token they give out would not be backed by gold because they give it out before the gold is even purchased.
Maybe. The law would require them to purchase that amount of physical gold and store it. That gold could and should be audited. With that said, who knows what could happen one day where they either lie or refuse to be audited, like Fort Knox or the federal reserve. If the law doesn't address this, then yeah, it's flawed.
Something to note is that the Texas bill allowed to redeem the digital currency for gold.
It's just an electronic gold certificate. These things exist already but usually, the gold exists before you buy the certificate.
Can you explain in your own words how a currency can be backed by a commodity in this day and age?
I will then explain to you why it is impossible.
I'm not looking for debate (as the thread title states, I'm just wondering what people think).
However, there's another article explaining how the Texas cryptocurrency would work, so I'll just quote it:
https://www.zerohedge.com/markets/texas-bill-would-create-state-issued-gold-backed-digital-currency
If you think it's flawed, I'm interested in your thoughts.
That's not a commodity-backed currency. That's just a token to buy gold and silver.
Interesting distinction you're making here. Can you demand gold for these digital coins? Or, is the number of coins limited to the amount of gold they have? If it's the later then this is really no different than instruments such as $GLD
https://legiscan.com/TX/text/HB4903/id/2737537
Here's the actual text. It's not a currency. It's a transferable token which grants you the right to a specific weight of gold. These things exist already. Any major gold vendor sells either physical gold or a certificate for a specific amount of gold.