Three US Republican senators have proposed a bill to protect the country from the global adoption of China’s CBDC (the digital yuan).
On May 25, three Republican senators, Tom Cotton, Mike Braun, and Marco Rubio, presented legislation to restrict the use of China’s central bank digital currency (CBDC) in the US.
The “Defending Americans from Authoritarian Digital Currencies Act” intends to ban the use of China’s digital currency payment system, e-CNY, for app stores and other uses in the United States.
According to the senators, the phrase “app store” refers to any publicly available website, software app, or another electronic service that distributes apps from third-party developers to users of computers, mobile devices, or other “general-purpose computing devices.”
App and software providers in the United States are prohibited from supporting or enabling e-CNY transactions, as well as any app that contains such transactions in the country, according to the bill.
Senators reasoned that prohibiting China’s digital yuan from being used in the United States would let the country avoid “direct control” and surveillance of users’ financial transactions.
Cotton, a known supporter of the digital dollar initiative in the United States, expressly stated that a CBDC may be used to spy on people’s financial activities, saying:
“The Chinese Communist Party will use its digital currency to control and spy on anyone who uses it. We can’t give China that chance — the United States should reject China’s attempt to undermine our economy at its most basic level.”
Senator Braun stated, “We cannot let this authoritarian regime to use their state-controlled digital money to penetrate our economy and the personal information of American individuals.” “The United States cannot afford to take this tremendous financial and surveillance risk,” Rubio said.
China was one of the first countries in the world to test its own digital currency, with the initial trials of the digital yuan beginning in April 2019. The Chinese government has been actively encouraging cross-border implementations of the digital yuan, engaging with central banks in Hong Kong, Singapore, and elsewhere, following repeated internal testing.
The Chinese CBDC has long been considered a national security danger by US authorities. Another bill introduced in March sought to restrict the use of China’s digital yuan, which might be used to evade penalties and compromise users’ personal information.