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Republican senators have highlighted a potential threat posed by the digital yuan and have proposed a bill to outlaw them from US app stores.
A trio of US senators introduced a bill that bars American app stores from hosting apps that accept China’s digital yuan. On May 25th, Republicans Tom Cotton, Mike Braun, and Marco Rubio introduced the bill seeking to protect Americans. The bill is called “Defending Americans from Authoritarian Digital Currencies Act.”
The bill states that companies in control of app stores “shall not carry or support any app in their app store within the United States that supports or enables transactions in e-CNY”. The implication of the bill is that the likes of Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOGL) cannot host apps that support the digital yuan on their respective app stores in the US. Furthermore, the lawmakers believe this prohibition would protect the US from the potential fallout if the digital yuan sees global adoption. A major worry is China potentially spying on America and its citizenry. The senators believe that Beijing can obtain “direct control” of users’ financial footprint.
One of the senators, Cotton, was explicit in his assessment of the Chinese CBDC and its perceived underlying threat level. As the Republican legislator put it:
“The Chinese Communist Party will use its digital currency to control and spy on anyone who uses it. We can’t give China that chance — the United States should reject China’s attempt to undermine our economy at its most basic level.”
Closer Look at the Bill
The Defending Americans from Authoritarian Digital Currencies Act bill purports that e-CNY is capable of compromising its host’s networks. This would afford “real-time visibility” to Beijing as well as pose privacy and security concerns to Americans. The term “network” refers to all publicly accessible websites, software apps and other electronic service distribution channels from third-party developers.
Another sponsoring senator, Rubio, was equally disapproving of the digital yuan and called for an American collective resistance to it. In Rubio’s own words:
“We cannot allow this authoritarian regime to use their state-controlled digital currency as an instrument to infiltrate our economy and the private information of American citizens. This is a major financial and surveillance risk that the United States cannot afford to make.”
US Historically Views Digital Yuan as A National Security Threat
Back in January 2021, Washington DC-based think tank The Center for a New American Security published a report on e-CNY. According to its findings, the digital yuan would grant the Chinese Communist Party (CCP) surveillance over its own people. The findings also further stated that such surveillance would lead to increased interference over the lives of Chinese citizenry. The think tank explained that the CCP would become equipped with “precise data about users and their financial activity.”
China is one of the first nations in the world to initiate its own CBDC. It launched the first e-CNY trials back in April 2019.