WASHINGTON, D.C. – Today, on his first day as Chairman of the Subcommittee on National Security, Illicit Finance, and International Financial Institutions, Congressman Blaine Luetkemeyer (MO-03) introduced the Chinese CBDC Prohibition Act 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 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,” said Chairman Luetkemeyer. “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.”   

Background: 
The Chinese CBDC Prohibition Act amends 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” includes 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. 
• Penalties for violation of this law include civil fines up to $100,000 and criminal penalties of up to five years in prison.

Currently, federally licensed MSBs are not engaging in transactions involving the digital Yuan. This bill would preempt potential attempts by MSBs to offer services that would increase usage of China’s Digital Yuan.