On November 8, 2023, the United States Congress witnessed the introduction of a significant piece of legislation – H.R.6307. Sponsored by Representative Zachary Nunn [R-IA-3], this bill aims to defend against the economic and national security risks posed by foreign adversarial blockchain networks. The bill has been referred to several key committees, including the House Foreign Affairs, Financial Services, and Intelligence (Permanent Select), for comprehensive consideration.
Central to the bill’s purpose is the prohibition of U.S. government personnel from engaging in business with blockchain companies based in China. This move signifies Washington’s growing skepticism towards China’s role in the cryptocurrency sector. The bill specifically targets iFinex, the parent company of Tether and issuer of USDT, the leading stablecoin by market cap. Co-led by Representatives Zach Nunn (R-Iowa) and Abigail Spanberger (D-Va.), the Creating Legal Accountability for Rogue Innovators and Technology (CLARITY) Act, extends these restrictions to include transactions with Chinese-based blockchain networks.
A key driver behind this legislative move is the concern over national security and data privacy. The bill seeks to prevent foreign adversaries from gaining backdoor access to critical national security intelligence and the private information of Americans. Rep. Nunn highlighted the urgency of addressing China’s significant investments in blockchain infrastructure, citing the potential risks to national security and data privacy.
The bill delineates clear restrictions for government personnel, banning transactions with specific entities like The Spartan Network, The Conflux Network, and Red Date Technology Co., the latter being pivotal in China’s national blockchain initiative and its central bank digital currency (CBDC), known as the digital yuan.
In light of these developments, Red Date Technology responded by clarifying the intended use of the BSN Spartan Network for conventional IT, not crypto. The company has invited U.S. officials to review its open-source code, encouraging independent assessments of their technology.
This legislative proposal follows a trend of increased scrutiny over Chinese technology in the U.S., paralleling earlier actions like the ban on TikTok for government personnel over security concerns. The bill reflects heightened vigilance over foreign involvement in critical technological sectors and the perceived risks they pose to national security.
The introduction of H.R.6307 marks a significant moment in U.S. legislative efforts to address the challenges and risks associated with foreign adversarial blockchain networks. It underscores the importance of maintaining national security and data privacy in the face of rapidly evolving technological landscapes, particularly in the realm of blockchain and cryptocurrencies.
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