> 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 w

> 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. > 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.” If this were actually put into effect, expect intense interest from current long-term owners of gold ETFs e.g. GLD. GLD steadily declines relative to spot bullion, as a means of charging to holders expenses of storage, security and management. The Texas proposal would apparently cover such costs entirely with fees on exchange transactions, making long-term holders something like free riders on the system.