U.S. Rep. Blaine Luetkemeyer (R-MO) introduced legislation to prohibit the use of the Chinese Central Bank Digital Currency, also known as the Digital Yuan, by U.S. licensed money service businesses.
The Chinese CBDC Prohibition Act would amend subchapter II of title 31 to add a prohibition on federally licensed Money Service Businesses from engaging in any transaction that involves a central bank digital currency issued by the People’s Republic of China.
The term Money Service Business refers to any entity doing business as a currency dealer or exchanger, check casher, issuer of travelers’ checks or money orders, money transmitter, and the U.S. postal service. Currently, federally licensed MSBs are not engaging in transactions involving the digital Yuan, the lawmakers said. However, this bill would preempt potential attempts by MSBs to offer services that would increase the usage of China’s Digital Yuan.
“The Chinese Communist Party uses the digital yuan to track in real-time every transaction made with the currency. It is one of the many ways the CCP maintains its stranglehold on the Chinese people,” Luetkemeyer said. “We must establish clear barriers to prevent the CCP from monitoring the transactions and collecting the financial data of American consumers and businesses. This bill is a necessary step in building those barriers.”
Luetkemeyer is chairman of the Subcommittee on National Security, Illicit Finance, and International Financial Institutions.
Penalties for violation of this law include civil fines of up to $100,000 and criminal penalties of up to five years in prison.