US lawmakers are scrambling to shield the country from the potential adverse effects of the global adoption of China’s national digital currency.
Three Republican senators, Tom Cotton, Mike Braun and Marco Rubio, on May 25 introduced a bill to limit the use of China’s central bank digital currency (CBDC) in the United States.
The bill is called the “Defending Americans from Authoritarian Digital Currencies Act” and proposes to ban the use of China’s digital currency payment system, e-CNY, for US app stores and other purposes.
The term “app store” covers all publicly available websites, software applications or other electronic services that distribute applications from third-party developers to users of computers, mobile devices or any other “general purpose computing device”, have noted the senators.
According to the bill, application and software distributors in the United States will not support or allow e-CNY transactions or support any application offering such transactions in the country.
The senators said banning the Chinese digital yuan in the United States would help the country avoid “direct monitoring” and surveillance of users’ financial activity.
Cotton, a known proponent of the US digital dollar project, specifically argued that a CBDC could be used to spy on people’s financial activity, stating:
“The Chinese Communist Party will use its digital currency to control and spy on anyone using it. We cannot give China that chance – the United States should reject China’s attempt to undermine our economy at its most basic level. »
“We cannot allow this authoritarian regime to use its state-controlled digital currency as an instrument to infiltrate our economy and the private information of American citizens,” said Senator Braun. “This is a major financial and supervisory risk that the United States cannot afford,” Rubio said.
Related: Brainard Briefs House Committee on Potential Role of CBDC and Future of Stablecoins
China is one of the first countries in the world to pilot its own digital currency, launching its first digital yuan trials in April 2019. After several internal tests, the Chinese government has actively promoted cross-border digital yuan implementations, in collaboration with central banks. from Hong Kong, Singapore and others.
US authorities have always considered the Chinese CBDC a threat to national security. In March, another bill also proposed to limit the use of the Chinese digital yuan because it can be used to circumvent sanctions and compromise users’ personal information.