Senator Bill Cassidy stated, “This bill keeps China accountable as they implement their new digital money.”
Nine Republican senators have endorsed legislation aimed at regulating US federal agencies’ policies in response to worries that China’s digital yuan could be used to bypass sanctions and compromise users’ personal information.
Louisiana Senator Law Cassidy and Tennessee Senator Marsha Blackburn submitted the Say No to the Silk Road Act on Wednesday, backed by seven other Republican senators. The bill would require certain government agencies to report on China’s central bank digital currency, or CBDC. The two senators expressed concerns about digital surveillance and privacy of citizens and overseas users as a result of China’s CBDC expansion.
If the bill is passed, the United States Secretary of Commerce and Commerce Representative will report on the effects of the digital yuan on trade as well as trade enforcement activities, while the Department of State will issue a warning about the CBDC. The bill also required the Office of Management and Budget to set criteria for agencies using the digital yuan, as well as foreign governments receiving military aid to reveal if they were using the CBDC.
“If left uncontrolled, technologies like as China’s digital yuan would enable Russia to circumvent global sanctions on systems such as SWIFT and enable the CCP to further spy and threaten their populace,” Blackburn warned.
China’s digital currency raises red flags considering the historic willingness of the CCP to control everything. @MarshaBlackburn Say No to the Silk Road Act lays out actions take to better prepare & manage risks associated w/ the CCP blockchain & digital yuan.
— U.S. Senator Cindy Hyde-Smith (@SenHydeSmith) March 9, 2022
With sanctions imposed by the United States and the European Union harming Russia’s economy, some sources say the country may turn to China for solutions, tapping into payment systems such as UnionPay. Many politicians have focused on digital assets as a possible way for Russia to circumvent these sanctions. On Wednesday, US President Joe Biden announced the signing of an executive order aimed at creating a regulatory framework for cryptocurrency, emphasizing its potential role in bypassing sanctions.
While crypto-related regulations in the US have not always been entirely partisan, Republican lawmakers appear to be leading the campaign against China’s CBDC, potentially undermining the dollar’s dominance. Senator Blackburn and Wyoming Senator Cynthia Lummis, both supporters of the aforementioned bill, addressed a letter to Olympic organizers in July 2021 urging them to prohibit US athletes from utilizing digital yuan during the Beijing Winter Games. According to reports, few foreign athletes used the digital currency at the tournament, despite the fact that Visa was also available.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.