Cowell calls Royal's idea for state-backed currency a threat

Steve Royal, the Republican candidate for state treasurer, believes North Carolina and neighboring states should band together and form a centralized, regional currency.

“In coordination, if possible, with adjoining states, it could be possible to create an auxiliary currency to help stimulate the regional economy, a centralized currency using state-owned real estate as equity – in other words – real money,” said Royal, in handwritten response to a candidate questionnaire distributed by the North Carolina Free Enterprise Foundation earlier this year.

Democrats have taken notice of the comment, which was one of three approaches Royal described as his vision for economic growth and job creation.

Janet Cowell, the incumbent treasurer and Royal's Democratic opponent, said that "ideas like Steve Royal’s which are so far out of the mainstream threaten everything we have worked so hard to build."

Royal said in an interview that he stands by the idea. He believes a state or regional currency backed by real assets, or one that is at least more hestitant to print extra currency, would hold up better than the U.S. dollar under current conditions.

"It's like a fire department or a police station," Royal said. "You build it even though you don't want to use it."

Royal said he mentioned the idea because he is among those upset with efforts by the Federal Reserve to stimulate economic recovery, especially through quantitative easing.