Texas Recognizes Gold, Silver as Legal Tender, Bitcoin Reserve Approved

Bitcoin's latest price was $, in the last 24 hours. Texas has recently passed a law recognizing gold and silver as legal tender, allowing residents to use them in everyday transactions based on the comptroller’s determined value at the time. The law, signed by Governor Greg Abbott, amends the state government code and is expected to take effect on May 1, 2027. The law does not prohibit Federal Reserve notes or other US currency for use as legal tender in Texas, nor does it require any person to accept gold or silver for the payment of a debt, for deposit, or for any other purpose. The law is based on a clause of the US Constitution stating no state shall “make any thing but gold and silver coin a tender in payment of debts.”

Under the Texas governor and Republican-led legislature, the US state government has moved forward with some bills proposing the adoption of cryptocurrencies such as Bitcoin. On the same day he signed House Bill 1056 into law, Abbott approved legislation for the creation of a state strategic Bitcoin reserve. The United States has been off the gold standard for day-to-day domestic transactions since 1933, when President Franklin D. Roosevelt signed an executive order requiring people to return “gold coin, gold bullion, and gold certificates” to the Federal Reserve. Though individual states like Texas have been exploring the adoption of different assets, they are barred from issuing notes and coins under the Constitution.

News outlets have suggested that the “establishment of a transactional currency” could allow Texas to recognize digital currency backed by gold or silver as legal tender. Some residents, however, questioned earlier attempts by the legislature to pass similar legislation, citing concerns for retailers. “How is the retailer going to protect themselves and be able to ensure that the gold or silver coin is authentic and not a counterfeit?” said Reddit user the_shootist in response to a proposed 2015 bill, adding: “There just seems like a lot of moving parts here that would need to be accounted for to make this viable.”

Several US states already recognize precious metals like gold as legal tender, but don’t require retailers to accept them as payment. Businesses in certain states have been accepting gold notes called “Goldbacks” as payment, though they do not qualify as legal tender backed by the state or federal government. The law in Texas is a significant step towards recognizing precious metals as a form of legal tender, and it remains to be seen how it will be implemented and received by residents and businesses alike.

Bhutan has emerged as a key player in the global cryptocurrency landscape by utilizing its surplus hydroelectric power for Bitcoin mining operations. This innovative approach positions Bhutan as a leader in sovereign crypto initiatives, with significant Bitcoin holdings of over 13,000 BTC, ranking third globally behind the USA and UK. The strategy not only leverages Bhutan’s abundant natural resources but also aligns with its national crypto strategy, enhancing its financial reserves and promoting technological adoption.

Key players in this initiative include Changpeng Zhao from Binance, who highlighted Bhutan’s unique use of hydro power for Bitcoin mining. The Bhutanese government is systematically integrating Bitcoin into its economy, which has broader implications for financial reserves and economic policies. This approach, similar to El Salvador’s earlier maneuvers, indicates a shift in tactics for national digital asset management. Potential outcomes include increased transparency demands and more nations adopting similar strategies, influencing the broader crypto market, especially Bitcoin.

The Securities and Exchange Commission (SEC) has formally acknowledged Grayscale’s amended application to convert its Digital Large Cap Fund into a spot ETF. This fund holds several of the most popular cryptocurrencies, including Bitcoin, Ethereum, Ripple’s XRP, Solana, and Cardano. If approved, the fund would be available on major stock exchanges, making it easier for regular investors to buy and trade a mix of top cryptocurrencies in one place. The SEC previously approved Grayscale’s Bitcoin futures ETF and allowed the conversion of Grayscale’s Bitcoin Trust into a spot Bitcoin ETF in January 2024 after a legal win by Grayscale against the SEC.

Grayscale recently proposed a brand-new ETF for Cardano. Unlike its other ETFs, which convert existing trusts, this one, called the Grayscale Cardano Trust, is a completely new product. However, the SEC has delayed its decision on two of Grayscale’s other proposals: the Avalanche and Cardano spot ETFs. The approval of Grayscale’s Digital Large Cap Fund as a spot ETF would mark a significant milestone in the cryptocurrency market, providing investors with a diversified and accessible way to invest in multiple cryptocurrencies through a single ETF. The SEC’s decision on this application will be closely watched by industry participants and investors alike, as it could pave the way for further innovation and growth in the cryptocurrency ETF space.