The United States is taking steps to safeguard the country against the potentially undesirable effects of China’s global adoption of its national digital currency.
Marco Rubio and Mike Braun, three Republican senators introduced a bill to limit the US’s use of China’s central bank digital currency (CBDC).
The bill, titled “Defending Americans From Authoritarian Digital Currencies Act”, proposes to ban the use of China’s digital currency payment system, e–CNY, for U.S. apps stores and other purposes.
Sentences noted that the term “app store” refers to all websites, apps, or electronic services which are publicly available and distribute apps from third-party vendors to users of computers, mobile devices, or any other “general-purpose computing devices”.
The bill states that app and software distributors in America shall not enable or support transactions in eCNY, nor any app that supports such transactions.
Senators argued that banning China’s digital currency in the U.S. would allow the nation to avoid “direct control” of financial transactions and surveillance.
Cotton, who is a proponent of the U.S. dollar project, stated that a CBDC could allow people to spy on their financial activities.
“The Chinese Communist Party will use their digital currency to spy on everyone who uses it,” We cannot give China this chance — the United States must reject China’s attempts to undermine our economy at its lowest level.”
Senator Braun stated that it was unacceptable for an authoritarian regime, such as the one in control of digital currencies controlled by the state, to attempt to penetrate our economy and steal private information from American citizens. Rubio stated that this was a serious financial and surveillance risk the United States cannot afford.
Related: Brainard speaks to House committee on the potential role of CBDC and future of stablecoins
China was the first country to launch its own digital currency. It launched its first trials of digital yuan in April 2019. After multiple internal testing, the Chinese government is actively encouraging cross-border use of the digital currency. It has been working with the central banks of Singapore, Hong Kong and other countries.
The Chinese CBDC has been viewed by the U.S. authorities as a threat to national security. Another bill was introduced in March to limit the use China’s digital currency, as it could be used to bypass sanctions or compromise user’s personal information.