Amid growing concerns over inflation and the erosion of the U.S. dollar’s value, Texas lawmakers are considering a bill that could redefine the financial landscape in the Lone Star State. HB 1056, introduced by Rep. Mark Dorazio, aims to establish a transactional system that allows Texans to use gold and silver for everyday purchases. The bill has generated considerable debate about its constitutionality, financial feasibility, and potential impact on commerce.
How HB 1056 Would Work
HB 1056 proposes the creation of a system where gold and silver held in the Texas Bullion Depository can be used for everyday transactions. Through a mechanism similar to existing platforms like Glint, Texans would be able to store precious metals in the depository and conduct transactions via debit cards or mobile apps. When making a purchase, the system would convert the value of gold or silver holdings into U.S. dollars at the point of sale.
Rep. Dorazio explained during his opening remarks that the system offers an alternative to fiat currency by enabling private citizens to use existing gold and silver specie as a medium of exchange. He emphasized that this approach does not “coin money,” which is prohibited by Article I, Section 10 of the U.S. Constitution, but rather allows for the lawful use of existing legal tender.
Clarifying Misconceptions on Constitutionality
A central point of contention during the March 26, 2025 (discussion begins at 3:24:23 and ends at 5:02:46 of the video in that link), hearing on HB 1056 revolved around whether the bill violates Article I, Section 10 of the U.S. Constitution. Victoria North, representing the Texas Comptroller of Public Accounts, claimed that implementing HB 1056 could expose state employees to criminal liability due to conflicts with federal laws governing currency. However, this argument misunderstands the constitutional boundaries between federal and state powers — and, more importantly, overlooks a critical constitutional obligation placed on the states.
Article I, Section 10 of the U.S. Constitution explicitly states:
“No State shall… coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts…”
This provision is often misunderstood or selectively cited by opponents of state-based monetary systems. While it prohibits states from coining money or issuing their own fiat currency, it also imposes an affirmative obligation on states to make gold and silver the only lawful tender for payment of debts. This is not optional — it is a constitutional mandate that states cannot ignore.
HB 1056 fully adheres to this constitutional framework and, in fact, brings Texas into compliance with the requirement that states treat gold and silver as legal tender, something that states have not done since Nixon closed the gold window in 1971. The bill does not coin money or create an alternative currency. Instead, it establishes a system that allows Texans to use already-minted gold and silver stored in the Texas Bullion Depository for everyday transactions. When a transaction occurs, the system automatically converts the gold and silver holdings into U.S. dollars at the point of sale, ensuring seamless functionality within existing financial structures.
The concerns expressed by Victoria North and Rep. Chris Turner (D) reflect a misunderstanding of the Constitution’s intent. Their objections mistakenly conflate the prohibition on coining money with the requirement that states use gold and silver as legal tender. Tom Glass, representing Texas Constitutional Enforcement, clarified this distinction during his testimony, stating:
“Texas is not coining money. This system merely allows Texans to transact with what is already recognized as lawful money under the Constitution.”
Strong Public and Expert Support
Support for HB 1056 was overwhelming, with 17 witnesses testifying in favor and an estimated 300 public comments submitted in support of the bill. Jason Cousins, founder of Glint, testified that similar systems are already operational in other jurisdictions and that the infrastructure for a gold and silver-based payment system is fully developed and secure.
Additionally, Mark Meckler, a constitutional attorney, and Cindi Castilla of the Texas Eagle Forum, underscored the bill’s importance as a safeguard against inflation and a means for Texans to protect their wealth.
Concerns from Opponents
While most testimony supported the bill, Rep. Chris Turner (D) expressed clear opposition, questioning whether Texas had the authority to create a system resembling an alternative currency. Turner raised concerns that such a system could undermine the federal government’s control over monetary policy and lead to legal challenges.
Despite these objections, many experts testified that HB 1056 stays within constitutional boundaries by facilitating the use of gold and silver in commerce without attempting to replace U.S. currency.
Fiscal Note: Implementation Costs and Revenue Uncertainty
The fiscal note attached to HB 1056 estimates a $5.54 million negative impact through August 31, 2027, with an ongoing annual cost of $2.77 million. These costs primarily stem from hiring six full-time employees (FTEs) for cybersecurity, legal services, and financial management, as well as maintaining the technology infrastructure needed to facilitate the system.
Although HB 1056 allows for the collection of transaction fees to offset costs, the amount of revenue generated remains uncertain. Whether the system becomes self-sustaining over time depends on user adoption and transaction volume.
What’s Next for HB 1056?
Following the extensive testimony on March 26, 2025, HB 1056 was left pending in committee for further consideration. The bill, which boasts over 70 bipartisan co-sponsors and has an identical companion bill (SB 2002) in the Senate, is expected to move forward in the coming weeks.
As Texas lawmakers weigh the implications of establishing a gold- and silver-backed currency system, the state stands at the forefront of exploring alternatives to traditional fiat money. Whether HB 1056 advances will depend on addressing lingering constitutional concerns and ensuring the financial viability of this innovative approach to sound money.
“With bipartisan support and growing public interest, HB 1056 remains a bill to watch as Texas considers an alternative to fiat currency and a potential safeguard for financial stability,” said Rep. Dorazio.
