Nine Republican senators backed legislation aimed at regulating the policies of US government agencies over concerns about the use of the Chinese digital yuan to circumvent sanctions and put users’ personal information at risk.
In an announcement Wednesday, Louisiana Senator Bill Cassidy and Senator Marsha Blackburn, with the support of seven other Republican senators, proposed the “Say No to Silk Road” bill, a bill that would require certain government agencies to report on Chinese digital currency, or CBDC. Two senators said they are concerned about digital surveillance and the privacy of citizens and foreign users due to China’s publication of the Convention on Biological Diversity.
If the bill is passed, the US Trade Representative will report on the impact of the digital yuan on trade as well as trade enforcement, and the State Department will issue a warning to the CBDC. The bill also included requiring the Office of Management and Budget to set guidelines for agencies that use the digital yuan, as well as for foreign governments to obtain financial assistance for their military to see if they use the commercial central bank’s currency.
“If technology, including the Chinese digital yuan, is left unchecked, it will allow Russia to evade global sanctions against systems like SWIFT and allow CCP to continue to track and threaten its own citizens,” Blackburn said.
With Russia currently facing US and European Union sanctions that threaten its economy, some reports indicate that the country may look to China for solutions and use of payment systems including UnionPay. Several lawmakers have turned their attention to digital assets, likely to allow Russia to sidestep these actions. On Wednesday, US President Joe Biden announced that he had signed an executive order to create a regulatory framework for cryptocurrency and mentioned his potential role in circumventing sanctions.
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While US crypto policy has not always been a hard party line, it appears that Republican lawmakers have led an attack on China’s cryptocurrency, potentially challenging the dollar’s dominance. Senator Blackburn and Wyoming Senator Cynthia Loomis, who also support the bill, wrote a letter in July 2021 urging Olympic officials to ban US athletes from using the digital yuan during the Beijing Winter Games. Reports indicated that few foreign athletes relied on cryptocurrency for the event with Visa available.