Senator Rick Scott introduced a prohibition act seeking to bar U.S. financial service operators from interacting with China’s central bank digital currency (CBDC).
The so-called Chinese CBDC Prohibition Act would ban U.S. post offices, remittance firms, peer-to-peer crowdfunding platforming and all money services businesses from facilitating any transaction that involves China’s digital yuan.
Senators Marsha Blackburn of Tennessee and Ted Cruz of Texas backed the act with their support, stressing that this legislation was crucial to keeping American financial data safe.
We should do everything in our power to ensure Americans are protected financially. This legislation is common sense: U.S. financial services should not engage in any transaction that involves the CCP’s Digital Yuan.Senator Marsha Blackburn
Rep. Blaine Luetkemeyer from Missouri also proposed Senator Scott’s bill to the House of Representatives.
The bills were fielded amid increased chatter concerning cryptocurrencies and efforts in the U.S. toward issuing regulatory frameworks for the budding digital asset industry.
While there are several proposed crypto laws on legislative floors like Senator Ted Budd’s “Keep Your Coins” Act, Galaxy Digital CEO Mike Novogratz expects a delay on any decisive vote until after the 2024 U.S. elections.
Launched in January 2022, China’s digital yuan, or e-CNY, was one of the world’s first CBDC built on blockchain technology. The government-issued crypto token hit $250 billion in transactions within 18 months of its pilot and has been deployed as a payment corridor for public workers in East China provinces.
Beijing’s CBDC was also commercialized by WeChat operator Tencent for a credit facility targeting SMEs. China’s blanket ban on Bitcoin was in place at press time although the country has also indicated regulatory interest in web3 sectors such as the metaverse.