On the 26th of May, a bill was proposed in the United States to ban Apple and Google from hosting applications that support the digital Yuan. According to the Republican senators in the US, such apps could be used to spy on Americans.
In the last few years, China has been a constant threat to the US economy. The governments of both nations have had multiple disputes, and it seems their rivalry will not be coming to an end anytime soon.
China has been enthusiastic about its e-currency, with the nation miles ahead of almost every other country in its CBDC experiment.
Earlier this year, WeChat announced that it would be supporting the digital yuan. The messaging application currently has over 1.2 billion users on Google Playstore and Apple Store. Alipay, owned by Jack Ma, is also hosted on Google PlayStore and Apple Store and supports the Chinese CBDC. Both companies will have to revert their decisions or risk being kicked out of the two largest application hosts.
The Reason for the Ban of e-CNY
Cotton’s office in the US reported that the digital yuan could reveal details of transactions done by residents of the United States in real-time. This will raise security and privacy concerns for US citizens.
The Chinese e-currency will foster financial surveillance in the country’s economy as transactions done using the CBDC will contain specific details about users.
In defense of the allegations, the Chinese embassy in Washington has described the new law as an abuse of state power. Citizens of China strongly believe the US uses its power to unnecessarily bully foreign companies. The claims of maintaining security seem to be overprotective and irrelevant.
Although the bill is yet to be effected, the chances of the law against the digital yuan standing are very high. Perhaps, China will fight back by banning the United States CBDC too when it is eventually launched.