US Senators Tom Cotton, Mike Braun and Marco Rubio, (all Republicans) have on May 25, 2022 introduced a bill seeking to limit the use of China’s central bank digital currency in the United States. The purpose of this bill is to protect the United States from any potential undesirable effects associated with the global adoption of China's CBDC.
The short title for this bill is the "Defending Americans from Authoritarian Digital Currencies Act" [Cotton, T. HEY22543. (Accessed May 27, 2022)]. More specifically, the bill seeks the following prohibition:
A covered company shall not—
(1) support or enable transactions in e-CNY on its app store within the United States; or
(2) carry or support any app in its app store within the United States that supports or enables transactions in e-CNY.
[Id].
Looking at this language more closely, three important definitions must be presented. 'Covered Company' is defined in the bill as: "any person that owns or controls an app store in the United States" [Id]. 'e-CNY' is defined in the bill as: " the official Digital Currency Electronic Payment system operated by the Government of the People’s Republic of China" [Id]. And 'App Store' is defined in the bill as: "a publicly available website, software application, or other electronic service that distributes applications from third-party developers to users of a computer, a mobile device, or any other general purpose computing device" [Id].
"The senators reasoned that banning China’s digital yuan in the U.S. would help the nation avoid 'direct control' and surveillance of users’ financial activity" [Partz, H. Draft bill to ban China’s digital yuan from US app stores. (Accessed May 27, 2022)].
Senator Cotton, a strong proponent of a US CBDC [see, e.g. Wright, T. Fed Nominee: Need for a Digital Dollar is an “Extremely Important Discussion”. (Accessed May 27, 2022)], has stated his belief that a CBDC can be used as a vehicle to spy on the public financial activity. In a press release, Cotton argued:
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.
[Cotton, T. COTTON, BRAUN, RUBIO INTRODUCE BILL TO LIMIT USE OF CHINESE DIGITAL CURRENCY IN THE U.S.. (Accessed May 27, 2022)].
Senator Braun added:
The Chinese Communist Party’s digital yuan allows direct control and access to the financial lives of individuals. We cannot allow this authoritarian regime to use their state-controlled digital currency as an instrument to infiltrate our economy and the private information of American citizens.
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And finally, Senator Rubio weighed in with the following:
It makes no sense to tie ourselves to the digital currency of a genocidal regime that hates us and wants to replace us on the world stage. This is a major financial and surveillance risk that the United States cannot afford to make.
[Id].
From a historical prospective, the United States has long viewed the Chinese CBDC as a 'national security threat' [See, e.g. Post, K. US intelligence is looking at Chinese CBDC as a national security threat. (Accessed May 27, 2022)]. In fact, in March, 2022, "Nine Republican senators have backed legislation aimed at directing the policy of U.S. government agencies around concerns that China’s digital yuan may be used to circumvent sanctions and compromise users' personal information" [Wright, T. Republican lawmakers introduce bill targeting China's CBDC on sanctions, privacy. (Accessed May 27, 2022)].
"While crypto-related policies in the United States have not always fallen strictly along party lines, Republican lawmakers seem to be leading the charge against China’s CBDC, potentially challenging the dollar’s dominance" [Id].