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The United States Senate is reportedly moving to enact a bill that will suspend China’s digitized money payments. The bill will prevent software giants, such as Google and Apple from launching applications that support e-Yuan.
The bill, sponsored by Senator Mike Braun, Tom Cotton, and Marco Rubio, aims to protect American users’ privacy. With the bill, there will be no room for further listing on the popular app stores if such apps have e-Yuan payment method.
Bill Will Prevent Round-the-Clock Visibility from China
Over the years, the United States government has been at loggerheads with China over security and privacy issues. The country has frequently accused its Chinese counterparts of introducing mediums to spy on Americans, such as the CBDC.
Washington security agencies once said that China’s electronic money would be a great benefit for surveillance. That’s because the government will effectively monitor transactions and have real-time data about users and events.
Republican Senator Cotton disclosed that eCNY could make Beijing have better visibility of all transactions done in the network. He further said that allowing software companies to launch apps supporting digital Yuan payments put Americans at risk of exposure.
The bill comes following Wechat and Alipay’s move to support eCNY payments. Currently, both applications are on Google and Apple stores.
The US Embassy says the bill exemplifies the country’s deliberate act of bullying international companies. It further condemned the United States’ abuse of power, adding that it’s using national security as grounds for its bullying.
CBDCs Roles in Global Economy
Various world economies are developing their CBDCs to facilitate cross-border payments and financially include unbanked individuals. As of this writing, about 90 countries are looking into having their CBDCs.
Economic experts and even central banks have opined that CBDCs will help the economy amid currency shortage and protect users. Since they are government-controlled, scams and fraudulent activities will be prevented.
The rising use of cryptocurrencies became a wake-up call for central banks. Given their state of volatility and poor regulations, the government stepped up efforts to launch an alternative medium of transaction. It will mitigate the risks associated with virtual currencies.
Surprisingly, the United States is yet to pilot a CBDC and trails its counterparts like China. On Thursday, Fed Vice-Chair called for rapid action, adding that having a digital dollar can ease global payments. The DOT and other monetary agencies are still observing the benefits and risks of launching electronic money.
China became the first country to launch digitized money in 2018 after four years of research. Other countries that have a CBDC are Nigeria and The Bahamas.