The Texas Bullion Depository Challenges the Federal Reserve System

In mid-June, Texas Gov. Greg Abbott signed into law HB 483, paving the way for Texas to repatriate $1 billion in gold from an underground vault in Manhattan operated by HSBC bank, bringing it home to be stored in a yet-to-be-built Texas Bullion Depository, reports HNGN, which also speculated whether this is the first step in Texas’ plan to secede. The gold is owned by the University of Texas’ endowment fund.

“Today I signed HB 483 to provide a secure facility for the State of Texas, state agencies and Texas citizens to store gold bullion and other precious metals,” Abbott said in an official statement in June. “With the passage of this bill, the Texas Bullion Depository will become the first state-level facility of its kind in the nation, increasing the security and stability of our gold reserves and keeping taxpayer funds from leaving Texas to pay for fees to store gold in facilities outside our state.”

Rep. Giovanni Capriglione, the author and sponsor of the bill, recently appeared on the Trunews talk show to speak with host Rick Wiles about what the legislation could mean for Texas.

“The really interesting part about this depository, which hasn’t been getting a lot of press,” said Capriglione as reported by Texas Observer, is that “with this depository, private individuals and entities will be able to purchase goods, and will be able to use assets in the vault the same way you’d be able to use cash.”

The Texas Bullion Depository – basically a private currency backed by gold just like old-time currencies – is, according to the show host, “the biggest threat in 102 years to the Federal Reserve System.” Capriglione agrees that it could very well make the Federal Reserve System unnecessary.

“The federal government can sue all they want, and I hope they don’t because I think they will lose,” said Capriglione in June, adding that Texas is on good solid legal ground to create the depository and operate it as stated in the bill. “There is a motto in the office of almost every state legislator in Texas, and it’s a flag that we have [from the Texas Revolution], it’s below a cannon and what the motto says is, ‘Come and Take It’,” he said.

Some observers read this story as an example of extreme anti-federal libertarianism and relate it to questionable political positions on other issues. On the other hand, as recent events in Europe show, many people throughout the world don’t trust their governments much and want to explore alternative forms of economy, including, of course, bitcoin.

In reply to a question on the possibility of “a Texas-style bitcoin,” Capriglione said “OK! That would be awesome, too. I personally own bitcoin. You could make transactions with bitcoin, use the gold depository as a medium, and then make payments on the other side.”

It isn’t clear what that means exactly. The concept of bitcoin backed by gold doesn’t seem to make too much sense, however, several alternative digital currencies that are backed in gold do exist. Instead, it seems likely that Capriglione refers to the possibility of using bitcoin to purchase gold held in the Texas Bullion Depository, and to sell the gold back for bitcoin.