3 ms·

IANAL, but doesn't Article I, Section 10 of the US Constitution[0] bar Texas from creating such a currency? [0] https://constitution.congress.gov/browse/essay/

IANAL, but doesn't Article I, Section 10 of the US Constitution[0] bar Texas from creating such a currency? [0] https://constitution.congress.gov/browse/essay/artI-S10-C1-2/ALDE_00001098/ https://constitution.congress.gov/browse/essay/artI-S10-C1-2...

walterbell 3y ago
> No State shall .. make any Thing but gold and silver Coin a Tender in Payment of Debts 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 U.S. UCC (Uniform Commercial Code) was modified in July 2022 to recognize CERs (controllable electronic records), a flexible definition that may encompass current and future digital currencies. It's now up to individual U.S. states to ratify the proposed UCC changes in state legislation, https://www.clearygottlieb.com//news-and-insights/publication-listing/ucc-digital-asset-amendments-finalized https://www.clearygottlieb.com//news-and-insights/publicatio... > Control under Article 12 is designed to be a technology-neutral functional equivalent of “possession.” It generally encompasses circumstances when a party has the “private key” or other mechanism to avail itself of substantially all of the benefits of the record, prevent others from availing themselves of such benefits, and transfer the record and associated benefits.
HillRat 3y ago
The use of the term "currency" in the bills is probably ill-advised for just that reason, but states can, under certain circumstances, issue bank notes that act essentially as currency or bills of credit; Briscoe v. Bank of Commonwealth of Kentucky, 36 U.S. 257 (1837) found such bank notes constitutional so long as they aren't issued under color state sovereignty -- that is, they must trade on "no pledge of the faith of the state, in any form." (The federal government eventually killed off state bank notes, not by attempting to outlaw them directly -- AFAIK! -- but by taxing them aggressively, though I don't believe those laws are on the books any more.) Having said that, the fact that these bills direct the state to establish the program, fixes in law the redemption of the "currency," and directs the state to hold gold reserves for the currency all suggest that this is Constitutionally questionable, because the bill is trading on "the faith of the state." Consider that, if Texas establishes a gold-backed stablecoin then executes a rug-pull, your legal options as an aggrieved party are limited due to state sovereignty, which is precisely the issue that the Constitution seeks to prevent (though at the time the question of sovereign immunity was somewhat less settled in the absence of the Eleventh Amendment).
hnburnsy 3y ago
Doesn't Starbucks and airlines in essence have their own digital currency which they frequently devalue?
- readthenotes1 3y ago
  They are not States

walterbell 3y ago

> No State shall .. make any Thing but gold and silver Coin a Tender in Payment of Debts 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 U.S. UCC (Uniform Commercial Code) was modified in July 2022 to recognize CERs (controllable electronic records), a flexible definition that may encompass current and future digital currencies. It's now up to individual U.S. states to ratify the proposed UCC changes in state legislation, https://www.clearygottlieb.com//news-and-insights/publication-listing/ucc-digital-asset-amendments-finalized https://www.clearygottlieb.com//news-and-insights/publicatio... > Control under Article 12 is designed to be a technology-neutral functional equivalent of “possession.” It generally encompasses circumstances when a party has the “private key” or other mechanism to avail itself of substantially all of the benefits of the record, prevent others from availing themselves of such benefits, and transfer the record and associated benefits.

HillRat 3y ago

The use of the term "currency" in the bills is probably ill-advised for just that reason, but states can, under certain circumstances, issue bank notes that act essentially as currency or bills of credit; Briscoe v. Bank of Commonwealth of Kentucky, 36 U.S. 257 (1837) found such bank notes constitutional so long as they aren't issued under color state sovereignty -- that is, they must trade on "no pledge of the faith of the state, in any form." (The federal government eventually killed off state bank notes, not by attempting to outlaw them directly -- AFAIK! -- but by taxing them aggressively, though I don't believe those laws are on the books any more.) Having said that, the fact that these bills direct the state to establish the program, fixes in law the redemption of the "currency," and directs the state to hold gold reserves for the currency all suggest that this is Constitutionally questionable, because the bill is trading on "the faith of the state." Consider that, if Texas establishes a gold-backed stablecoin then executes a rug-pull, your legal options as an aggrieved party are limited due to state sovereignty, which is precisely the issue that the Constitution seeks to prevent (though at the time the question of sovereign immunity was somewhat less settled in the absence of the Eleventh Amendment).

hnburnsy 3y ago

Doesn't Starbucks and airlines in essence have their own digital currency which they frequently devalue?

readthenotes1 3y ago
They are not States