Financial regulation
China CBDC ban targets money transfer firms
Senators Rick Scott and Ted Cruz are backing a bill that would bar money services businesses from handling direct or indirect transactions involving a Chinese central bank digital currency.
A Senate bill from Senator Rick Scott and Senator Ted Cruz would block money services businesses from handling transactions tied to a central bank digital currency issued by China. The measure is still in committee.
- Targets money transfer firms, not all digital assets
- Covers China’s central bank digital currency, or CBDC
- Rick Scott leads the bill, with Ted Cruz as cosponsor
- Would bar direct and indirect transactions involving the currency
- Money transfer firms could be cut out of any transaction involving a central bank digital currency, or CBDC, issued by the People’s Republic of China
Money transfer firms could be cut out of any transaction involving a central bank digital currency, or CBDC, issued by the People’s Republic of China. In the Senate, Florida Republican Rick Scott has introduced a bill that would make that a federal line for money services businesses, the nonbank firms that move money for customers.
For people and companies that rely on those rails, the practical effect would be blunt. If a transaction touches that currency, a covered business could not handle it.
The compliance line
The proposal would add a new section to federal law governing money services businesses and define that term by existing Treasury regulations. It would prohibit those firms from engaging in any transaction, directly or indirectly, that involves the Chinese CBDC.
Texas Republican Ted Cruz is the cosponsor. The measure does not rewrite U.S. digital-asset law as a whole; it zeroes in on one foreign-issued digital currency and the companies that would have to process it.