US Senators Propose Ban on China’s Digital Yuan Transactions
Senator Rick Scott has introduced a bill that aims to prevent U.S. financial service providers from engaging with China’s digital yuan. The Chinese CBDC Prohibition Act, supported by Senators Marsha Blackburn and Ted Cruz, seeks to prohibit post offices, remittance firms, crowdfunding platforms, and money services businesses from facilitating any transactions involving China’s digital currency.
According to Senator Blackburn, the legislation is necessary to protect American financial data. Rep. Blaine Luetkemeyer has also proposed the bill to the House of Representatives amid growing discussions about cryptocurrency regulations in the U.S.
Despite other proposed crypto laws like Senator Ted Budd’s “Keep Your Coins” Act, Galaxy Digital CEO Mike Novogratz predicts that a decisive vote on these bills may be delayed until after the 2024 U.S. elections.
China’s Digital Yuan and Regulatory Landscape
China launched its digital yuan in January 2022, becoming one of the first countries to introduce a CBDC based on blockchain technology. The e-CNY has seen significant transaction volumes and has been used as a payment method for public workers in East China provinces. Additionally, WeChat operator Tencent has commercialized the digital yuan for a credit facility targeting small and medium-sized enterprises (SMEs).
Although China has imposed a blanket ban on Bitcoin, it has shown interest in regulating web3 sectors such as the metaverse.
Hot Take: US-China Crypto Relations and Regulatory Outlook
The proposed Chinese CBDC Prohibition Act reflects growing concerns about the implications of China’s digital yuan for U.S. financial data security. As regulatory discussions continue in the U.S., it is evident that the country is closely monitoring developments in the crypto space and considering appropriate measures to safeguard its financial interests.
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