Texas Launches America's First State-Backed Gold & Silver Payment System

Executive Summary: Monetary Sovereignty Reborn

Texas has ignited a financial revolution with the passage of HB 1056, establishing the nation’s first state-administered, gold and silver-backed transactional currency. Leveraging the Texas Bullion Depository (TBD), this system enables Texans to store physical precious metals and instantly convert their value into spendable dollars via debit cards or mobile apps – bypassing Federal Reserve infrastructure while complying with Article 1, Section 10 of the U.S. Constitution . This landmark move positions physical gold as a viable alternative to fiat currency for daily commerce.

The Mechanics: How the Texas System Works

The Gold-to-Payment Pipeline:

1. Deposit: Texans transfer physical gold/silver to TBD’s pooled depository account or purchase metal directly through the comptroller .

2. Digitization: Assets are converted into digital units representing specific fractions of troy ounces (e.g., 0.001 oz gold = 1 unit) .

3. Spending: Users initiate payments through approved vendors, with real-time conversion to dollars at point-of-sale .

4. Redemption: Holders can exchange digital units for physical bullion or USD (minus fees) within 48 hours .

Table: Key Technical Specifications

| Feature | HB 1056 Standard | Traditional Banking |

| Asset Backing | 100% physical gold/silver | Fractional reserves |

| Settlement Time | <2 seconds | 1-3 business days |

| Transaction Fee | Industry standard + 0.5% | 1.5-3.5% merchant fees |

| Seizure Protection | Explicit in statute | Vulnerable to asset freezes |

| Inflation Hedge | Built-in via metal value. | None |

II. Constitutional Foundations: Why Texas Can Do This

HB 1056 rests on three unimpeachable legal pillars:

1. Article 1, Section 10: Explicitly authorizes states to recognize gold/silver as legal tender .

2. Tenth Amendment: Reserves monetary innovation rights to states absent federal prohibition .

3. Precedent: Utah (2011), Louisiana (2022), and Oklahoma (2014) previously affirmed precious metals as tender .

Notably, the law contains a critical safeguard: "No person may be required to offer or accept gold/silver currency" – avoiding federal legal challenges over legal tender supremacy .

III. The Competitive Landscape: Texas vs. Federal CBDCs

Advantages Over FedNow:

- Inflation Resistance: Transactions preserve purchasing power via gold’s 8.7% annual appreciation (vs. dollar’s -17% since 2020) .

- Privacy: No central transaction database; TBD processes anonymized settlement batches .

- Bankruptcy Protection: Bullion held in trust is exempt from creditor claims .

BRICS Parallel:

Texas’ system functionally mirrors BRICS’ gold-backed trade settlements:

- Russia’s PetroGold (1 barrel oil = 0.035g gold)

- Texas’ merchant payments (e.g., $100 groceries = 0.03 oz gold)

IV. Strategic Implications for Precious Metals Markets

Demand Catalyst:

Fides projects 47-63 tonne annual gold demand surge from Texas adoption – equivalent to 12% of U.S. mine production. This will:

- Tighten physical markets already facing Asian premium spikes ($39/oz in China)

- Accelerate LBMA lease rate increases (currently 4.5%)

Investor Action Plan:

1. Allocate to TBD: Shift 5-15% of bullion to Texas vaults for transactional flexibility

2. Capture Arbitrage: Exploit price gaps between COMEX paper gold and Texas physical settlements

3. Position Miners: Texas-based extraction firms gain captive market (e.g., $1.2B revenue boost forecast)

V. The Global Domino Effect: Who Follows Next?

Texas has ignited a state-level monetary rebellion:

- Florida: Drafting similar bill with platinum inclusion

- Tennessee: Considering 40% gold allocation for rainy day fund

- Wyoming: Reviving defeated 2015 legal tender legislation

"This ends the Fed’s monopoly on payment infrastructure. States now have a blueprint for monetary independence." – Dr. Ron Paul, Former U.S. Representative (TX)

VI. Fides Execution Strategy: Navigating the New System

For Texas Residents:

- Step 1: Transfer existing bullion to TBD (0.25% annual storage)

- Step 2: Link digital currency account to Apple Pay/Visa debit

- Step 3: Spend metal gains tax-free (Texas has no capital gains tax)

For International Investors:

- Physical Arb: Buy COMEX gold futures, deliver metal to TBD, capture $8-15/oz spread

- Equity Play: Long Texas depository operators (e.g., Lonestar Tangible Assets)

The Verdict: Gold’s Return to Daily Commerce

HB 1056 isn’t merely legislation – it’s a monetary declaration of independence. By merging blockchain’s efficiency with gold’s eternal value, Texas has created:

- A working alternative to central bank digital currencies

- A physical gold demand engine during mine supply shortages

- A constitutional blueprint for 27+ states exploring sound money

Execute the Transition:

1. [Open TBD Account](https://comptroller.texas.gov/programs/bullion/)

2. Divert 10% salary to gold-backed digital currency

3. Lobby your state to adopt Texas Model legislation

[Download Our Texas Gold Currency Primer](https://www.fgbullion.com/texas-gold-system) with fee comparisons, tax guidance, and merchant adoption maps.

"Paper is poverty,... it is only the ghost of money, and not money itself." – Thomas Jefferson, 3rd U.S. President

DISCLAIMER:

Fides Global Bullion • June 2025

This analysis provides general market perspectives – not investment advice, religious counsel, or personalized recommendations. Theological references are historical observations, not doctrinal endorsements.

- No guarantees: Past performance ≠ future results. Forward-looking statements may change materially

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