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Based on the text of Senate Bill 2334, which was introduced by state Senator Bryan Huges (R), and House Bill 4903, which was introduced by state Representative Mark Dorazio (R), 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 comptroller shall establish a digital currency that is backed by gold so that each unit of the digital currency issued represents a particular fraction of a troy ounce of gold held in trust,” the bills state, adding that if needed, a private vendor can be enlisted to help establish the digital currency.
The comptroller would also be required to create a mechanism that would allow the new gold-backed digital currency to be used by citizens for their daily transactions. “In establishing the digital currency the comptroller shall establish a means to ensure that a person who holds the digital currency may readily transfer or assign the digital currency to any other person by electronic means.”
All gold reserves backing the digital currency would be held in a trust with the Texas Bullion Depository that is controlled by the comptroller or another entity appointed by the comptroller. “The trustee shall maintain enough gold to provide for the redemption in gold of all units of the digital currency that have been issued and are not yet redeemed for money or gold,” the bills read.
There will be no limit on the amount of gold-backed digital currency that Texans can purchase. As soon as a purchase is made, the comptroller will be required to “buy a fractional number of troy ounces of gold equal to the number of units of the digital currency issued to the purchaser, and issue to the purchaser a number of units of the digital currency equal to the amount of gold that the comptroller purchases with the money received from the purchaser.”
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.
Holders can also elect to redeem the digital currency for gold. The comptroller or one of its designated agents “may manage redemption of the digital currency for gold by the use of bars or coins of standard sizes and may pay fractional remainders in cash as necessary to facilitate the transaction,” the bill states.
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.”
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There's always a lot of stuff they don't get to.As expected, the Texas legislature's session ended without considering HB4903. Maybe it will be reintroduced next session.
This March, voters in the Texas Republican primary election will see on their ballots a proposition calling for the state government, utilizing its Texas Bullion Depository that began operations in 2018, to advance the use of gold and silver as legal tender.
The proposition reads as follows: “The Texas Legislature should establish authority within the Texas State Comptroller’s office to administer access to gold and silver through the Texas Bullion Depository for use as legal tender.”
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No idea if this bill has legs, but Texas surprises sometimes so who knows...
The gold depository they built - $25M? - is basically empty and unused. I believe the University of Texas - or was it some pension fund? - put there some gold but later took it out and sold it.
It seems that there are forces who support gold but there are also forces who oppose it. Or they believe in gold but don't have a clear strategy.
I don't understand, if they want to use it as Bullion Depository, who cares about the comex.The COMEX refused to allow the Texas repository into their system.
UTIMCO wanted gold vaulted where they could trade it via Comex.
Sorry but the more I think about it the more it doesn't make any sense to meUTIMCO wanted gold vaulted where they could trade it via Comex. Comex refused to bring Texas Bullion Repository into their vaulting network
Good to know PM, thanksUTIMCO was never a client of the TBD. UTIMCO used to own a lot of physical gold warehoused in NYC. They decided not to move their gold when the TBD was established because they wanted to keep the gold where it could easily be sold if needed. UTIMCO is an institution that has to answer to various parties. It's not some goldbug dude with diamond hands.
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Along with ideas on the depository’s design, Hegar requested thoughts on whether the state should vie for membership in the Chicago Mercantile Exchange’s COMEX platform, where gold futures contracts are traded. The question is crucial to whether Texas will be able to achieve a widely reported declaration by Abbott’s office in June that Texas would “repatriate $1 billion of gold bullion from the Federal Reserve in New York to Texas.”
The gold bullion at issue is actually worth only $647 million and is owned by the University of Texas Investment Management Company, which oversees the assets of both the University of Texas and Texas A&M systems. UTIMCO currently pays about $647,000 a year to store the gold at the HSBC Bank headquarters in New York City, according to UT System spokeswoman Jenny LaCoste-Caputo.
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“The gold everyone talks about is actually about $800 million in gold investments that the University of Texas has held in a bank in New York,” Perryman says.
In order to invest and trade that amount of gold, it must be held by an institution that is a member of COMEX, a market that facilitates the buying, selling and transfer of gold bullion. The university’s assets are held in a COMEX member bank, but the new Texas depository is not a COMEX member, meaning the gold cannot be transferred to the Texas facility.
“As a practical matter, this is not Texas gold in the sense some people may think of it,” Perryman says. “It’s an investable asset of the University of Texas, and obviously, to be good stewards of the resources, they need to have the liquidity to hold a fixed asset of this nature. And to do that, you have to be a COMEX member.”
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UTIMCO could be a Texas depository customer, but has placed two conditions on bringing its holdings to Texas. First, it mustn’t cost more to store gold in Texas than in New York; and second, the depository must be a member of COMEX, a metals exchange with standards that ensure the quality of all gold transferred between accounts. Based in the U.S. but used by traders around the globe, COMEX currently licenses eight vault facilities, all within 150 miles of New York City.
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Matt Ferris, chairman of Lone Star Tangible Assets, the private company Texas tapped to operate the depository, ... has stated that the depository has not become a member of COMEX due to geography. The eight vaults licensed by COMEX are all within 150 miles of New York City, according to the Texas Comptroller’s website. That proximity means exchanges can happen quickly, boosting liquidity.
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The Texas Legislature should establish authority within the Texas State Comptroller’s office to administer access to gold and silver through the Texas Bullion Depository for use as legal tender.
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In my first session as a state representative, I filed legislation to make gold and silver legal tender and functional money in the state of Texas—able to be transacted with the modern convenience of a debit card. While we weren’t able to get it across the finish line, we made great progress on this important issue.
In December of last year, the National Association of Christian Lawmakers voted unanimously to make our bill model legislation for all fifty states, and while that is absolutely wonderful, I want Texas to lead.
The technology already exists today. For example, I am the proud owner of a Glint card. When I load money onto my Glint card, I am actually buying gold that is held in Switzerland, and the value that I have on the card is equal to the gold that I purchased.
If the price of gold goes up, so too does the value I have on the card. When I spend with a merchant, they are paid in U.S. dollars, and Glint liquidates the same value in gold from my holdings. However, in the meantime, the value being tied to gold has given me a hedge against inflation.
Unfortunately, as wonderful as the service is, there are a couple major problems with it. First, I want my gold and silver held right here in the United States. Second, there are tax and privacy implications because my Glint gold is considered an investment by the IRS. Every expenditure has a tax consequence and because of that, there is no privacy.
My legislation solves these problems. We already have the existing Texas Bullion Depository that would allow us to store our gold in our state. Second, this legislation meets the constitutional requirements of Article 1, Section 10 of the United States Constitution regarding legal tender and the federal government’s definition of “functional money”.
All of this means that when the value of a citizen’s gold goes up, it should be exempted from taxation—considered functional money and not as an investment. While this may end up being decided in the courts, I feel strongly based on existing judicial precedent such as Briscoe v Bank of Kentucky that the legislation would hold up to such judicial scrutiny.
By creating functional money, this legislation should prevent the privacy, compliance costs, and tax implications associated with the current Glint card.
I also want to take a moment to look at this from a 20,000-foot view and talk about why it’s important we get legislation like this in place now to protect our citizens in the future. There are two developments, moving at a rapid pace right this moment, that aim to drastically change the global economy and commerce moving forward. The first is the BRICS nations working hard to move away from the US dollar and ultimately to topple it from its position as the global reserve currency. If that happens, it’s going to mean bad things for the dollar and higher inflation destroying the livelihood of our citizens.
The second is the coordinated efforts at the World Economic Forum and in many nations around the world—including the United States—to create central bank digital currencies and move to a cashless society. Let’s make no mistake, this is about control. Every transaction you make will be monitored. Every unit of currency is ultimately able to be controlled by computer code.
You could be frozen out of your entire life savings in an instant. Maybe you “earned” a bad social credit score, and of course, with a few keystrokes they can also inflate the heck out of the digital currency, too.
I’ve spent the last forty years building a construction company from the ground up. I wake up early, and a lot of days I get in the dirt with my guys. These are the hard-working men who build America and just want to provide for their families. I’m watching as the inflation caused by our federal government continues to destroy paychecks and saving power for them and everyone else. I’m also looking to the future and have significant concerns about whether the same American Dream will be available to future generations or whether they will be saddled with inflation, surveillance, and control.
That protection of our citizens rights and the American Dream is what my legislation is really about. It does that by making gold and silver functional money that can be transacted with the convenience of a debit card. A vote in favor of Proposition 7 is a vote in favor of a piece of legislation like mine being enacted into Texas law. It’s a vote in favor of sound money, privacy, and the American Dream.
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I’ve spent the last forty years building a construction company from the ground up. I wake up early, and a lot of days I get in the dirt with my guys. These are the hard-working men who build America and just want to provide for their families. I’m watching as the inflation caused by our federal government continues to destroy paychecks and saving power for them and everyone else. I’m also looking to the future and have significant concerns about whether the same American Dream will be available to future generations or whether they will be saddled with inflation, surveillance, and control.
Glint, interesting. I don't know them. Glint card enabling to spend your gold at point of sale. Wonderful.The technology already exists today. For example, I am the proud owner of a Glint card. When I load money onto my Glint card, I am actually buying gold that is held in Switzerland, and the value that I have on the card is equal to the gold that I purchased.
When I spend with a merchant, they are paid in U.S. dollars, and Glint liquidates the same value in gold from my holdings. However, in the meantime, the value being tied to gold has given me a hedge against inflation.
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