US Congressman Proposes New Law to Prohibit Government Officials from Using “Chinese Blockchain”, Even Tether’s Parent Company Included

Creative Title: US Congressman Proposes New Law to Prohibit Government Officials from Using "Chinese Blockchain", Even Tether's Parent Company Included

Creative Title: US Congressman Proposes New Law to Prohibit Government Officials from Using "Chinese Blockchain", Even Tether's Parent Company Included

According to CoinDesk, US lawmakers introduced a new bipartisan bill on Wednesday (8th), which prohibits government officials from conducting business with Chinese blockchain companies. The bill also explicitly prohibits officials from trading with iFinex, the parent company of Tether, the issuer of the stablecoin USDT.

The bill, titled “Creating Legal Accountability for Rogue Innovators and Technology” (CLARITY), is jointly led by Republican Congressman Zach Nunn and Democratic Congresswoman Abigail Spanberger. According to a press release, the bill aims to prevent the government from utilizing blockchain network infrastructure, blockchain service providers, and distributed ledger technology developed by China and other foreign adversaries. It also directs the US Secretary of the Treasury, Secretary of State, and Director of National Intelligence to develop a plan to “mitigate the risks posed by the development of blockchain technology by China and other foreign adversaries.”

The legislation is intended to ensure that foreign adversaries do not have “backdoor access to critical national security intelligence and the privacy information of Americans.” Congressman Nunn, a freshman member of the House, stated:

The bill also prohibits US officials from trading with the development companies behind The Spartan Network, The Conflux Network, and Red Date Technology Co., the company behind China’s national blockchain project and central bank digital currency.

The two sponsors of the bill are not part of the House leadership and do not hold significant roles in committees. Other more senior lawmakers have been pushing for multiple cryptocurrency-related bills, some of which also involve security issues. Some bills have already been approved by the full House Committee and are advancing further, so the new bill is unlikely to preempt them.

Prior to these restrictions, some lawmakers had previously banned government employees from using the Chinese social media app TikTok due to security concerns. Earlier this year, a former executive of TikTok’s parent company, ByteDance, alleged in court documents that the Chinese Communist Party used secret “backdoors” in its social media platform to monitor the location and messages of Hong Kong activists in 2018. ByteDance vehemently denied these allegations later on.