Three Republican senators are pushing to prohibit portals from allowing apps that facilitate payments of China’s digital yuan out of concern that it could be used for espionage against American citizens.

The proposed “Defending Americans from Authoritarian Digital Currencies Act” would outlaw the use of China’s e-CNY for app stores and other uses in the United States.

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US Says No To Digital Yuan

Senators Mike Braun (IN), Tom Cotton (AR), and Marco Rubio (FL) consider this a question of national and economic safety, and they intend to oppose China’s efforts to weaken the US economy.

The proposed legislation prohibits app retailers, including Google and Apple, from hosting applications that collect virtual currency purchases. This includes the popular messaging service WeChat, which stated earlier this year that it will support the Chinese digital currency.

Senator Marco Rubio characterizes China's digital yuan as a "significant financial and surveillance risk." (American Civil Liberties Union)

China began its pilot test of the e-CNY in 2019 and has since implemented it in at least 15 cities. The e-CNY, which is intended to replace actual coinage, is controlled by the government and issued by a central bank, unlike cryptocurrencies such as Bitcoin or Ether.

US Fears Chinese Spying Via Digital Currency

In a statement, Braun argued that China may use the state-controlled digital currency to gain access to the private data of American residents and the economy.

According to the senators, the phrase “app store” encompasses all software apps, publicly available websites, and other electronic services that distribute apps from third-party developers to users of PCs, mobile devices, and other “general-purpose computing devices.”

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Cotton issued a press statement on Thursday stating:

“The Chinese Communist Party will use its digital currency to spy on anyone who uses it. We can’t allow China to get that opportunity — the US should deny China’s attempt to undermine our economy.

Rubio characterized the digital yuan as a “significant financial and surveillance risk that the United States cannot afford to take.”

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The digital money of China has prompted privacy and safety worries. During the 2022 Olympic Games in Beijing, a group of Republican legislators urged American athletes against using the digital yuan, fearing that the central bank could track it.

China’s digital yuan project now leads all central bank digital currency initiatives, with the Asian nation conducting multiple testing and announcing its willingness to pursue international payments.

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