Texas

Texas is taking bold steps toward financial independence by passing House Bill 1056 (HB 1056) in the 89th Legislature (2025-2026) on May 1st, 2025. This legislation proposes the creation of a state-issued digital currency fully backed by gold and silver, a move that could redefine the state’s economic landscape. By leveraging the Texas Bullion Depository and drawing on constitutional principles, Texas aims to establish a sound money alternative to Federal Reserve notes. A late amendment to the bill, requires approval from a “federal court of competent jurisdiction” before Texas can issue its own currency. The next steps are to approve the bill in the state senate and prove that the currency meets federal regulations. Below, we explore the motivations behind HB 1056 and why Texas may create its own gold and silver currency.

Economic Stability Through Sound Money

One of the primary drivers behind HB 1056 is the desire to protect Texans from inflation and economic instability. Federal Reserve policies, including quantitative easing and low interest rates, have raised concerns about the devaluation of the U.S. dollar. Gold and silver, historically stable stores of value, offer a hedge against such risks. HB 1056 mandates that the Texas Comptroller issue gold and silver specie (coins) and establish a digital currency 100% backed by these precious metals. This currency would be redeemable in physical metals or cash, providing Texans with a reliable medium of exchange immune to inflationary pressures.

Countering Central Bank Digital Currencies (CBDCs)

The rise of central bank digital currencies (CBDCs) globally has sparked fears of increased government surveillance and control over financial transactions. HB 1056 positions Texas as a counterweight to CBDCs by offering a decentralized, precious metal-backed alternative. The bill’s supporters argue that a state-issued gold and silver currency would preserve financial privacy and autonomy, allowing Texans to transact without reliance on federally controlled digital systems. By establishing this currency as legal tender for debt payment in Texas, HB 1056 aims to create a viable competitor to potential federal digital currencies.

Leveraging the Texas Bullion Depository

Central to HB 1056 is the Texas Bullion Depository, operational since 2020 in Leander, Texas. The depository serves as the secure storage facility for the gold and silver backing the proposed currency. Under HB 1056, the depository would issue specie and manage a pooled account of precious metals, with the digital currency representing fractional ownership of these assets. This infrastructure, unique among U.S. states, gives Texas the capacity to implement a gold-backed currency without relying on external institutions, reinforcing state sovereignty over its financial systems.

Constitutional and Historical Precedent

HB 1056 draws inspiration from Article I, Section 10 of the U.S. Constitution, which prohibits states from making anything but gold and silver coin a tender for debts. Proponents of the bill view it as a return to constitutional money, bypassing the Federal Reserve’s fiat currency system. Texas has a history of embracing precious metals, having established the nation’s first state-administered bullion depository in 2015. HB 1056 builds on this legacy, positioning Texas as a leader in the modern sound money movement and potentially inspiring other states to follow suit.

Broad Political Support

The bipartisan support for HB 1056 underscores its appeal across political divides. With 63 Republicans and 20 Democrats as co-sponsors, the bill reflects a shared concern about economic uncertainty and federal overreach. This broad backing increases the likelihood of HB 1056 advancing through the legislative process, despite challenges such as a recent amendment-related delay on the House floor in May 2025. The bill’s popularity signals Texas’ readiness to embrace innovative financial solutions that prioritize stability and independence.

Practical Benefits for Texans

HB 1056 is designed to integrate seamlessly into daily life. The proposed digital currency would be electronically transferable, similar to modern payment systems, and usable via debit card-like mechanisms for everyday transactions. This practicality makes the currency accessible to businesses and individuals alike. Additionally, the currency’s redeemability in gold or silver specie ensures tangible value, offering Texans a choice between fiat dollars and precious metal-backed money. Such flexibility could enhance consumer confidence and stimulate local economies.

Challenges and Criticisms

Despite its ambitions, HB 1056 faces hurdles. Critics argue that a gold-backed digital currency could be volatile, given fluctuations in precious metal prices. Regulatory challenges, including compliance with federal banking laws, may complicate implementation. Additionally, the Texas Bullion Depository’s capacity to manage large-scale gold and silver reserves remains untested at the scale envisioned by HB 1056. However, supporters counter that these challenges are surmountable, citing Texas’ robust infrastructure and the bill’s careful design to ensure stability and compliance.

A Vision for the Future

HB 1056 represents more than a financial experiment; it’s a statement of Texas’ commitment to economic sovereignty and resilience. By creating a gold and silver-backed currency, Texas seeks to shield its citizens from inflation, reduce dependence on federal monetary systems, and offer a model for sound money nationwide. As the 89th Legislature debates this groundbreaking bill, the eyes of the nation are on Texas, watching to see if it can turn this vision into reality. Whether HB 1056 passes or sparks further innovation, it underscores Texas’ role as a trailblazer in redefining money for the 21st century.

The history of gold in Texas, while not as prolific as in California or Alaska, is a tapestry woven with threads of Spanish exploration, fleeting gold rushes, and persistent, albeit modest, discoveries. The allure of "El Dorado" drew Spanish conquistadors to the region as early as the 16th century. Francisco Vázquez de Coronado's expedition, driven by tales of the mythical Seven Cities of Cibola, traversed vast stretches of what is now Texas, searching for golden treasures. While they found no opulent cities, the seeds of belief in Texas's mineral wealth were sown. This early period ingrained the idea that gold lay hidden beneath the state's rugged terrain.

The mid-19th century saw the most significant period of gold excitement in Texas. In 1853, reports of substantial gold discoveries along the Upper Colorado River ignited a brief but intense "Texas Gold Rush." Newspapers nationwide trumpeted stories of rich strikes, attracting a flood of hopeful prospectors. Towns like Rough and Ready sprang up overnight, fueled by the promise of easy wealth. However, the reality of Texas gold proved far less bountiful than the rumors. The initial excitement quickly faded as miners found only meager pickings. The exaggerated reports of vast gold deposits were largely a product of wishful thinking and speculative hype. While some gold was indeed found, it was never in the quantities that had been promised.

Despite the short-lived gold rush, small-scale gold discoveries continued to occur throughout the 19th and 20th centuries, particularly in the Llano Uplift region and the Trans-Pecos area near Presidio and Hazel. The Llano Uplift, with its exposed Precambrian rock formations, proved to be a source of placer gold, found in the gravels of streams and rivers. The Trans-Pecos region, with its volcanic geology, also yielded small amounts of gold, often associated with other minerals like silver and lead. These discoveries, though not commercially significant, sustained the hope of finding larger deposits. Small mining operations and individual prospectors worked these areas, scraping a modest living from the land.

In more recent times, recreational gold prospecting has become a popular pastime in certain areas of Texas. Equipped with metal detectors and pans, enthusiasts search for gold flakes and nuggets in the state's rivers and streams. While the chances of striking it rich are slim, the thrill of discovery and the connection to the state's history continue to draw prospectors. The establishment of the Texas Bullion Depository, a state-administered gold depository, reflects Texas's role in the storage and handling of precious metals, even if large-scale mining is not a significant part of the economy. The depository serves as a secure storage facility for gold and other precious metals, solidifying Texas's position in the national and international gold market, though not through extraction. So, while Texas may not be synonymous with gold like California or Colorado, its history is punctuated by the enduring allure of the precious metal, from the Spanish explorers to modern-day prospectors.

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