Could a US state start using its own cryptocurrency?

[Elwar]

Article 1, Section 8 of the Constitution enumerates several powers to Congress including:

To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;
To provide for the punishment of counterfeiting the securities and current coin of the United States;

Article 1, Section 10, Clause 1 of the US Constitution limits the powers of States, including:

No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit (emphasis added); make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.


As it stands right now, states do not accept gold or silver coin as payment for debts. The Federal government does not coin money.

This is all done by a third party, Federal Reserve.

So why would a state not be able to use a third party crypto created specifically for their state by an anonymous "Satoshi" type?

I recall one push long ago in Iceland where someone created an Iceland currency, they sent X amount of coins to every registered citizen of the country (at least, they made it available to be claimed).

Something similar could certainly be done for a state. The key would be setting it up so businesses and individuals could use the currency within the state fairly easily.

It appears that the US Federal government is ok with destroying the dollar. If a state wanted to protect their economy from going down with everyone else they could start using another currency.

Even if it's required to accept USD for taxes, there could be a single exchange for paying your taxes with the new local currency such that you never even touch a dollar.

Any thoughts?



*Self Moderated due to franky1 likely thinking that a simple question is me trying to pass some "get rich quick" scheme. Even though every project I have invested in since getting involved in Bitcoin has left me with much less money.

[1715435438]

1715435438

[BADecker]

But search on Private Membership Association (PMA). It's not hard to set one up. When such is done, members can do what they want as long as they don't harm other people.

If an altcoin were to be set up as a PMA, the members could use it among their group, the PMA. As long as they didn't use money with it, it would be private... like when you play poker in the basement with your friends for match sticks.

If the people of a State decided they wanted to form this kind of a membership, they could use the altcoin within the State borders, as long as they didn't convert any to dollars or other altcoins.

The State leaders couldn't officially set this up, but State leaders might have enough clout so that people would start using it when they did it privately.

Here's the guy who really got this going - https://www.youtube.com/watch?v=qTq13vOxpZk.

Here's an attorney that has been setting things up for folks for quite some time - https://www.youtube.com/watch?v=2lupSn80_PY.

One of the biggest hindrances in getting around government is, you have contracts and agreements with them. And you don't understand the signifigance of these contracts and agreement, even though you know what they are for. If you aren't careful when doing the PMA, government will come back on you because of some agreement you signed with them. You can beat this, but this isn't a place to talk these details.

[philipma1957]

Solid silver Ltc coins would appear to qualify under the constitution ,but that article is older and newer articles could void it.

Gold btc coins could work but I would prefer a 200 usd value  coin to fight a court battle rather than a 50000 Usd value  coin.

I am pretty sure newer admendments void the silver or gold coin idea in the op admendment quoted.

[PrimeNumber7]

From a technical perspective, yes, from a realistic perspective, no.

There isn't any reason why businesses within a state wouldn't be able to use a payment processor to accept bitcoin, provided regulations are not excessively cumbersome. There also isn't any reason why businesses couldn't accept altcoins via the same payment processor.

I also don't see why businesses in Tennessee, for example, would be willing to accept TNcoin in masse if this altcoin doesn't have any special value above what any other random altcoin has. I also don't see why the market would give any special value to this altcoin if state taxes must be paid in dollars, and if dollars must be accepted for payment.

The US Dollar has a world reserve currency status. This means that dollars are accepted throughout the world, and merchants often give preference to Dollars over the local currency. If a US state were to try to do this, the majority of financial transactions would still occur in US dollars.

[Elwar]

From a technical perspective, yes, from a realistic perspective, no.

There isn't any reason why businesses within a state wouldn't be able to use a payment processor to accept bitcoin, provided regulations are not excessively cumbersome. There also isn't any reason why businesses couldn't accept altcoins via the same payment processor.

I also don't see why businesses in Tennessee, for example, would be willing to accept TNcoin in masse if this altcoin doesn't have any special value above what any other random altcoin has. I also don't see why the market would give any special value to this altcoin if state taxes must be paid in dollars, and if dollars must be accepted for payment.

The US Dollar has a world reserve currency status. This means that dollars are accepted throughout the world, and merchants often give preference to Dollars over the local currency. If a US state were to try to do this, the majority of financial transactions would still occur in US dollars.

This would be the key. If you could somehow make the currency attributes specific to that state then people would be encouraged to use it. Like, maybe it's a POS token where there is a rewarded amount given out to every citizen of the state every transaction or some sort of distribution based on property or something unique to that state (oil in Texas, Uranium in Utah, etc.).

The USD is a world reserve currency but it is being destroyed. The latest $2 trillion stimulus bill is being used as a weapon against states, tying contingencies to accepting the funds to states such as not allowing them to lower taxes, encouraging them to raise taxes, etc. The Federal Reserve is run by the Federal government and if the individual states keep using the dollar they will lose their independence as the Federal government just needs to print out more dollars to bribe the states into centralising power. If the states want to take their sovereignty back they need to take their currency back into their own hands.

Sure, taxes could be paid in USD. Just like when I charge up my phone card on bitrefill with bitcoins. I don't use dollars but the phone company gets dollars. The USD could just be some unused accounting currency for dealing with the government while everything else is in crypto.

[BADecker]

^^^ However, businesses all over the country use private money. It's called strore coupons.

[PrimeNumber7]

I also don't see why the market would give any special value to this altcoin

This would be the key. If you could somehow make the currency attributes specific to that state then people would be encouraged to use it. Like, maybe it's a POS token where there is a rewarded amount given out to every citizen of the state every transaction or some sort of distribution based on property or something unique to that state (oil in Texas, Uranium in Utah, etc.).

The USD is a world reserve currency but it is being destroyed.

In order for an altcoin backed by a state to be valuable, it would need to have some attribute that other mediums of exchange do not have.

States could have their state specific altcoin backed by some natural resource, so in Texas, for example, might have one TXcoin be backed by 1/10 of a barrel of oil, but this would mean the altcoin's value would be based on the underlying commodity. States could also give some incentive to use their altcoin in financial transactions within their state, for example, a state could exempt transactions involving their altcoin from certain taxes, such as sales tax, but I would see little reason for the state to do this (what benefit would the state receive?).

As to your comment that the USD is being destroyed, I would note that other major currencies, such as the Euro, UK Pound, Yen, and Chinese Yuan are all seeing similar levels of government borrowing in each of their respective currencies. Based on this, I don't see the US dollar losing its status as a world reserve currency based on government spending/borrowing. The massive global government borrowing may result in global inflation, but we have seen historically elevated government borrowing levels for about a decade without excessive inflation; maybe there is a limit to this borrowing, I guess we will see.

[GeorgeJohn]

Thats really means this world will be full of emulation of cryptocurrency, because if really U.S many countries emulate their system of living have cryptocurrency that bears their name automatically China will like to have their own crypto for transaction, so from my perspective it will make Bitcoin to be less values and each country starting introducing the own then cryptocurrency will now be centralized not decentralized again because it's managed and controlled by a sector, in a country, which is government and their objectives via cryptocurrency will come to passed.

[Elwar]

I also don't see why the market would give any special value to this altcoin

This would be the key. If you could somehow make the currency attributes specific to that state then people would be encouraged to use it. Like, maybe it's a POS token where there is a rewarded amount given out to every citizen of the state every transaction or some sort of distribution based on property or something unique to that state (oil in Texas, Uranium in Utah, etc.).

The USD is a world reserve currency but it is being destroyed.

In order for an altcoin backed by a state to be valuable, it would need to have some attribute that other mediums of exchange do not have.

States could have their state specific altcoin backed by some natural resource, so in Texas, for example, might have one TXcoin be backed by 1/10 of a barrel of oil, but this would mean the altcoin's value would be based on the underlying commodity. States could also give some incentive to use their altcoin in financial transactions within their state, for example, a state could exempt transactions involving their altcoin from certain taxes, such as sales tax, but I would see little reason for the state to do this (what benefit would the state receive?).

As to your comment that the USD is being destroyed, I would note that other major currencies, such as the Euro, UK Pound, Yen, and Chinese Yuan are all seeing similar levels of government borrowing in each of their respective currencies. Based on this, I don't see the US dollar losing its status as a world reserve currency based on government spending/borrowing. The massive global government borrowing may result in global inflation, but we have seen historically elevated government borrowing levels for about a decade without excessive inflation; maybe there is a limit to this borrowing, I guess we will see.

If every country in the world is inflating their currencies then a single state holding a strong currency could become the next world economic powerhouse. An island of happy commerce surrounded by a sea of despair and keynesian economic destruction.

[DaveF]

Utah has is it's own *non* crypto currency https://goldback.com/
So in theory yes they could go crypto. Would not be as nice looking as a shiny gold bill.
Now, would anyone use it. That is a different question. More people seem to be collecting goldbacks then using them so it's a tough call.

-Dave

[BADecker]

Utah has is it's own *non* crypto currency https://goldback.com/
So in theory yes they could go crypto. Would not be as nice looking as a shiny gold bill.
Now, would anyone use it. That is a different question. More people seem to be collecting goldbacks then using them so it's a tough call.

-Dave

The question is, as technology becomes more readily available small-scale, might these bills be counterfeited in somebody's garage? There should be a hand-held metal detector that you can run a bill through, that can read if a bill offered to you has the proper amount of gold in it. Or is such available, already?

[DaveF]

Utah has is it's own *non* crypto currency https://goldback.com/
So in theory yes they could go crypto. Would not be as nice looking as a shiny gold bill.
Now, would anyone use it. That is a different question. More people seem to be collecting goldbacks then using them so it's a tough call.

-Dave

The question is, as technology becomes more readily available small-scale, might these bills be counterfeited in somebody's garage? There should be a hand-held metal detector that you can run a bill through, that can read if a bill offered to you has the proper amount of gold in it. Or is such available, already?

Not sure, any of the regular precious metal detectors will tell you that there is 24k gold in it. I don't know if anyone has made a passthrough one like they use to detect regualr counterfeit bills.

There is also the fact that the $50 which is the largest made only has .05 oz or 1.4g of gold so:

You would have to make the bill and get the gold into it, but not as much gold as the normal one, which is a small amount and deal with the technical hurdles of dealing with the gold loss when manipulating gold in small amounts.
I'm sure there are other things but I have not had my coffee yet.

-Dave

[Vatimins]

     There are ways to go about this but not that beneficial for people who are into investing. But for people who love innovation though, it will be quite a great experience. The thing is, we still go back to the fact that government and banks want control on almost everything. Now let us say, there are pretty few or no laws being violated, they will akways come up of a way that would make things more beneficial to them. That's just how things are right now. Not just in the US, but almost all ocer the world entirely.

[Tash]

Its amazing how far back people are.  Bill Gates right now the only sovereign individual. Most likely he read the twenty year old book "The Sovereign Individual".

[PrimeNumber7]

If every country in the world is inflating their currencies then a single state holding a strong currency could become the next world economic powerhouse. An island of happy commerce surrounded by a sea of despair and keynesian economic destruction.

Currency is not the only measure of economic strength. Total economic activity is probably a better measure. There are some third world countries that peg their local currency to the dollar and their economy will not prosper if their economy is not producing goods and services that are in demand.

Obviously, the Keynesian economic theory is nonsense, but I don't think anyone is even making the Keynesian argument this time around. In the US, Democrat special interests are being handed lots of money.