Nine Republican senators have backed legislation aimed at directing policy at U.S. government agencies around concerns China’s digital yuan may be used to circumvent sanctions and compromise users’ personal information.
In a Wednesday announcement, Louisiana Senator Bill Cassidy and Tennessee Senator Marsha Blackburn, backed by seven other Republican senators, proposed the ‘Say No To the Silk Road Act’ – a bill that would require certain government agencies to report on China’s central bank digital currency, or CBDC. The two senators said they had concerns over digital surveillance and privacy in China’s rolling out its CBDC, both for its citizens and foreign users.
Should the bill pass, the U.S. Secretary of Commerce and Trade Representative would report on the effects of the digital yuan on trade as well as trade enforcement actions, while the Department of State would issue a warning on the CBDC. The bill also included requirements for the Office of Management and Budget to develop guidelines for agencies using the digital yuan, and having foreign governments receiving financial assistance for their military to disclose if they were using the CBDC.
“If left unchecked, technologies including China’s Digital Yuan will empower Russia to evade global sanctions on systems such as SWIFT and enable the CCP to further surveil and threaten their citizens,” said Blackburn.
China’s digital currency raises red flags considering the historic willingness of the CCP to control everything. @MarshaBlackburn Say No to the Silk Road Act lays out actions take to better prepare & manage risks associated w/ the CCP blockchain & digital yuan.
– U.S. Senator Cindy Hyde-Smith (@SenHydeSmith) March 9, 2022
With Russia currently facing sanctions from the U.S. and EU threatening its economy, some reports have suggested the country may turn to China for solutions, tapping into payment systems including UnionPay. Many lawmakers have turned their attention to digital assets for potentially allowing Russia to evade these measures. On Wednesday, U.S. President Joe Biden announced he had signed an executive order focused on establishing a regulatory framework for crypto – mentioning its possible role in circumventing sanctions.
While crypto-related policies in the United States have not always fallen strictly along party lines, Republican lawmakers seem to be leading the charge against China’s CBDC potentially challenging the dollar’s dominance. Senator Blackburn and Wyoming Senator Cynthia Lummis – also a supporter of the aforementioned bill – penned a letter in July 2021 urging Olympic officials to forbid U.S. athletes from using the digital yuan during the Beijing Winter Games. Reports suggested that few foreign athletes relied on the digital currency at the event with Visa also available.