Nine Republican senators backed legislation aimed at guiding US government agency policy over concerns that China’s digital yuan could be used to circumvent sanctions and compromise users’ personal information.
In an announcement Wednesday, Louisiana Sen. Bill Cassidy and Tennessee Sen. Marsha Blackburn, backed by seven other Republican senators, proposed the “Silk Road No Act,” a bill that would require some government agencies to report on China’s central bank digital currency. . or CBDC. The two senators said they have concerns about digital surveillance and privacy as China rolls out its CBDC to both its citizens and foreign users.
If the bill passes, the Commerce Secretary and US Trade Representative will report on the impact of the digital yuan on trade, as well as trade enforcement measures, and the State Department will issue a warning to the CBDC. The bill also included requirements for the Office of Management and Budget to develop guidelines for agencies using the digital yuan and for foreign governments receiving financial assistance for their military to disclose whether they use CBDCs.
“If left unchecked, technology, including the Chinese digital yuan, will allow Russia to bypass global sanctions on systems like SWIFT and allow the CCP to continue to spy on and threaten its citizens,” Blackburn said.
China’s digital currency is worrisome given the CCP’s historic willingness to control everything. @MarshaBlackburn “Say No to the Silk Road Law” outlines the actions to be taken to better prepare and manage the risks associated with the CCP blockchain and the digital yuan. — US Senator Cindy Hyde-Smith (@SenHydeSmith) March 9, 2022
As Russia is currently facing US and EU sanctions that threaten its economy, some reports suggest the country may be looking to China for solutions using payment systems including UnionPay. Many lawmakers have turned their attention to digital assets as they potentially allow Russia to evade these measures. On Wednesday, US President Joe Biden announced that he had signed an executive order aimed at creating a regulatory framework for cryptocurrency, mentioning its possible role in circumventing sanctions.
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While U.S. cryptocurrency policy has not always been strictly on party lines, Republican lawmakers seem to be leading the charge against China’s CBDC, which could potentially challenge dollar dominance. Senator Blackburn and Wyoming Senator Cynthia Lummis — also a supporter of the aforementioned bill — wrote a letter in July 2021 urging Olympic officials to ban U.S. athletes from using the digital yuan during the Beijing Winter Games. Reports suggested that few foreign athletes relied on digital currency at the event with Visa available.