Senator Rick Scott has initiated a legislative proposal titled the Chinese CBDC Prohibition Act to prevent U.S. financial entities from processing transactions involving China’s digital currency. The act seeks to extend this prohibition to include various financial service providers like post offices, remittance companies, and money services businesses.
Support for this measure is evident as Senators Marsha Blackburn and Ted Cruz have expressed their endorsement, highlighting the importance of safeguarding American financial information. Senator Blackburn emphasizes the need for protective measures within the financial sector against the Chinese Communist Party’s Digital Yuan.
In a similar vein, Representative Blaine Luetkemeyer is advocating for the bill in the House. The introduction of this and other cryptocurrency-related bills comes at a time when the U.S. is actively exploring regulatory frameworks for emerging digital assets, although any definitive legislative action may be postponed until after the 2024 elections, as suggested by Galaxy Digital’s CEO, Mike Novogratz.
China’s foray into digital currencies with the e-CNY, launched in early 2022 and based on blockchain, has seen significant adoption with a transaction volume of $250 billion in its initial 18 months. While currently utilized in certain regions for governmental payments and by Tencent for SME financing, China maintains its prohibition on Bitcoin and expresses regulatory interests in areas like the metaverse.