The real risk is, the stablecoins will be backed by UST. The banks will hold UST as collateral and issue stablecoins against them. When the value of that collateral changes, mark-to-market, not maturity value, it will have some impact on the stablecoin, because it will be similar to breaking the buck for the money market funds.
To that extent there will be systemic risk. OTOH, US treasury encourages this, because it will create $2T new demand for treasuries. While the demand for UST from other sovereigns are going down, this will cushion that impact.
So short term we want it, long-term we will cross the bridge when we have to.
This would be really difficult to use in daily transactions.
The dollar value fluctuates constantly.
Gold isn’t useful for daily-size transactions. A 1/10 ounce 24K gold coin (currently worth about $330) is smaller than a dime and very delicate. Mine have never been out of their sealed plastic envelopes because they are so soft and easy to damage.
Yes. Those who are behind this law has an agenda, that agenda may or may not be achieved just passing the law. May be this is the first step, where Texas may introduce their own version of currency backed by Gold. Yes, I understand states don’t have the ability to issue currency, but what if there is a crypto currency issued by a state agency backed by gold and silver?
The mixture of Greed, unashamed grift, willingness to bend rules and ability to package it as policy is currently very high. It starts from POTUS and his family and runs all the way down.
It doesn’t work in either direction. Legal tender means the government recognizes it as payment. Basically, it means you can pay your taxes with it.
As a private citizen you can require payment in cockleshells and give change in wampum in you like. Although I think technically wages must be paid in legal tender up to the Federal minimum wage.
On the one hand, they have 42% of the oil production in the country. On the other hand, Republicans have 27 of their 38 House seats, so the national balance would change rather dramatically. Both Senators are also Republican, and that would not change the Senate, but it would be on a knife’s edge.
