Senator Tom Cotton has introduced a bill that seeks to help the United States fight against the hegemony that China can exert through its digital currency, the yuan.
A bill introduced by U.S. Senator Tom Cotton of Arkansas and Senator Bill Hagerty of Tennessee would ban the use of China's digital yuan on app stores, software stores and other websites in order to protect and ensure the financial security and privacy of its citizens.
The regulatory proposal, called Defending Americans from Authoritarian Digital Currencies Act, is focused on minimizing the potential risks that the digital currency issued by the Central Bank of China, the digital yuan or e-CNY, may entail for the American economy.
According to Reuters, the proposal Explicitly prohibits app store companies from offering or supporting any type of app on their stores within the United States that allows transactions with e-CNY from China.
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For the senators, the digital yuan is an instrument that can help the Central Bank of China collect financial data from its users, both domestic and foreign. Hence the importance of limiting and prohibiting its use, in order to guarantee and maintain the security of citizens and the country.
For his part, Senator Bill Cassidy of Louisiana had pointed out in March of this year that the digital yuan could help Russia escape the commercial and financial sanctions imposed by the US government on the country after declaring war on Ukraine. At that time, Cassidy also presented a regulatory proposal aimed at limiting the use of the digital yuan.
The United States is against surveillance of the digital yuan
According to Senator Cotton, the Chinese government is seeking to increase its power through this digital currency for international use. Both Cotton and Hagerty believe that, through the digital yuan, China could monitor the financial activity of American citizens, threatening the country's national security and economic interests.
Cotton said the U.S. government cannot give China the opportunity to monitor and spy on Americans, as this would be tantamount to allowing it to undermine its national economy at its most basic level.
In July 2021, Senators Marsha Blackburn, Roger Wicker, and Cynthia Lummis, a Bitcoin enthusiast and advocate, expressed similar concern. They wrote a letter calling on the United States Olympic Committee to ban the use of the digital yuan by American athletes attending the Beijing Olympics.
In the letter, the US senators explained that China's central bank digital currency could compromise financial security and privacy, as it is a tool that operates under the absolute control of the country's central bank, which could facilitate surveillance by this banking entity.
Although the United States has made important steps in the last year to move toward cryptocurrency innovation and blockchain, the country's political representatives fear that key features of the digital yuan's design give the Chinese government the ability to monitor and control the finances of users of such a digital currency. For this reason, they reject its use in the country.
261 million digital yuan users
Earlier this year, the People's Bank of China (PboC), the country's central bank, reported that its digital currency exceeded more than 261 million active users, growing more than 108% in just a few months.
China's digital currency, which has been in development for more than six years, received a major boost in 6, when the central bank began implementing the digital yuan in different scenarios as part of its pilot testing program, to speed up its official launch, which was scheduled to take place during the Beijing Games.
To the date, More than a dozen regions in China are operating with the digital yuan, as well as other sectors such as the Shanghai metro, several of the country's largest commercial banks, e-commerce platforms such as JD.com, shopping malls, among others.
Last April, China launched a new pilot with this digital currency, which includes 6 cities in the province of Zhejiang, where the 2022th edition of the XNUMX Asian Games will be held. Therefore, it is estimated that the government could make the use of the digital yuan official throughout the national territory next September.
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