- Texas legalizes gold and silver as legal tender for everyday transactions.
- A digital currency backed by metals will comply with state and federal rules.
- The law may lead to future blockchain tokenization and increased financial autonomy.
Texas Governor Greg Abbott has signed a new act that officially recognizes gold and silver as legal tender for daily financial transactions. The new law, championed by State Representative Mark Dorazio and supported by the Republican Party of Texas, marks the first major statewide effort in the U.S. to formally integrate precious metals back into the official currency system.
How Will the New System Work?
The new bill authorizes Texans to use both gold and silver coins and bullion as a valid form of currency. The system is backed by the Texas Bullion Depository, which is managed by the State Comptroller’s office and will act as the secure custodian for all the precious metals in the program. The law also establishes a new digital currency that is fully backed by the gold and silver held in the depository. This metals-backed digital currency is designed to comply with both state and federal regulations.
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This step allows residents and businesses in Texas to conduct transactions using gold and silver alongside traditional fiat currency. The law fulfills a promise stated in the Texas Constitution, which supports the recognition of precious metals as currency.
Financial and Regulatory Implications
By introducing this alternative payment system, Texas is asserting a new level of financial autonomy, a move that is certain to draw attention from financial regulators in other states and at the federal level. The initiative aims to diversify the state’s monetary environment by offering a “hard money” alternative to fiat currency that many residents and businesses may prefer due to its intrinsic value.
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While the legislation does not currently include cryptocurrencies, the creation of a state-backed digital currency opens the door to the future possibility of tokenizing these precious metals on a blockchain, a move that could blend traditional sound money with modern digital finance.
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