In the process of seeking a stable currency, a legislator in Texas submitted two bills that, if passed, would create a gold silver backed trading currency, 100% backed by underlying assets, which would become the state's legal tender.

According to the Tenth Amendment Center, on November 12th, Texas Congressman Mark Dorazio submitted House bills 1049 and 1056, which have similar language and will supplement different parts of Texas law.

Mike Maharay, the communications director of the Tenth Amendment Center, wrote, "Under the proposed law, the Auditor General of Texas will issue gold and silver coins through the Texas Gold and Silver Depository and establish a gold and silver trading currency, defined as' representing gold and silver held in a common deposit account. 'The Depository will be required to hold sufficient gold and silver to support 100% of the issued currency

He pointed out that if approved, these bills would enable holders of gold and silver coins and currency to use them as the legal currency for Texas' debt repayment '. Currency backed by gold and silver will be able to be transferred to another person electronically. Currency backed by gold and silver will be exchanged in gold coins or gold spot prices denominated in US dollars minus related fees

In other words, the passage of any bill will allow anyone in the state to use gold and silver for commercial transactions.

Maharrey said, "The passage of this legislation will create a sound currency alternative to the US dollar in both physical and electronic forms. With a gold and silver backed trading currency, any individual or entity can conduct business using a debit card that seamlessly converts gold and silver into legal tender in the background. Individuals and businesses will be able to use assets held in the Texas Gold Vault to purchase goods and services, just as they use the US dollars held in banks today

He emphasized that the ability to trade currencies supported by gold and silver "will provide people with a way to protect themselves from the rapid loss of the inherent purchasing power of the legal dollar.

Maharrey pointed out, "Over time, allowing gold and silver to be used for daily transactions by the general public may have a wide-ranging impact. Professor William Greene is an expert in constitutional currency, and in a paper he wrote for the Mises Institute, he said that if people in multiple states really start using gold and silver instead of dollar bills, it will effectively abolish the Federal Reserve and end the federal government's monopoly on currency

According to Greene, "Over time, as the residents of the state use both US dollar bills and gold and silver coins, in fact, coins are more valuable than the US dollar, which will lead to the 'reverse Gresham law' effect, where good money (gold and silver coins) will drive out bad money (dollars)

Greene added, "When this happens, a series of events begin to occur, including real wealth flowing into state treasuries, an influx of banking business from outside the state (people in other states hope to conduct business with banks in sound currency), and ultimately strong protests against any transactions using the US dollar

Maharrey explained, "Gresham's law holds that 'bad money drives out good money.' For example, when the US government replaced 25 cent and 10 cent silver coins with coins mainly made of less valuable copper, cheap coins pushed the silver coins out of circulation. People hoarded higher value silver coins and spent lower value copper coins

This leads to a question: "So, how do you reverse Gresham

He said, "The key is to make it easier to use gold and silver in daily transactions. The reason why bad currency drives out good currency is that the government has set barriers to using sound currency in daily life, which makes the cost of spending gold and silver higher and stimulates hoarding

He added, "When you eliminate legal and tax barriers, you create a fair competitive environment that allows gold and silver to compete head-on with the US dollar. In a fair competitive environment, gold and silver can always defeat fiat currency

Maharrey emphasized the US Constitution to strengthen his views, stating that Article 1, Section 10 of the Constitution stipulates that "no state shall use anything other than gold, silver, or coins as currency for debt repayment

He said, "In most states, debt and taxes are either paid in dollars, the legal currency authorized by Congress, or in coins issued by the US Treasury Department, which rarely contain gold and silver. Creating a tradable gold and silver currency would take another step towards the constitutional requirement, which has been ignored in every state for decades. This strategy would undermine the Federal Reserve's monopoly by introducing competition into the monetary system

The proposed bill will be submitted to the Texas House Committee at the beginning of the legislative session on January 14, 2025.