Republican senators have put forward a bill that would make it illegal for app stores in the US to accept payments made with China’s new digital currency, citing national security concerns.
The ‘digital Yuan’ or ‘e-CNY’ is a centralized, cash-like digital currency with a value tied to the physical Yuan. It \was launched by the Chinese government earlier this year as an alternative to decentralized cryptocurrencies.
Consumers are promised the same convenience and anonymity that cryptocurrencies promise but, because it is controlled by a central bank rather than a distributed ledger, authorities still retain control over value and can obtain enough data to tackle illegal activities such as money laundering.
Digital currency
The senators behind the bill fear the system could allow Chinese authorities to spy on Americans, Reuters reported, as they would have access to “real-time visibility into all transactions on the network, posing privacy and security concerns for American persons who join this network.”
This view is supported by the Center for a New American Security think tank, which believes the digital currency will expand the surveillance capabilities of the Chinese government.
Chinese government restrictions mean many global digital platforms and services have a limited presence in the country or are absent entirely, including Facebook, Google, and Twitter. This has given rise to domestic platforms such as Alibaba and Sina Weibo, which are hugely popular but relatively unknown outside their homeland.
Several of these apps have confirmed they will support the e-CNY and are offered on the Apple App Store and Google Play, leading to the concerns of some in the senate.
The Chinese Embassy in Washington told the news agency that the concerns were unfounded.
Via Reuters
