U.S. Bill Prohibits Government Access to China-Made Blockchains and USDT


A new measure with support from both parties would prevent government agencies from using Chinese-built networks to conduct cryptocurrency transactions.

According to a statement released by the bill’s authors, on Wednesday, U.S. legislators presented legislation that would prohibit federal government personnel from doing business with Chinese blockchain enterprises.

The parent firm of Tether, the issuer of the biggest stablecoin in the world, USDT, is iFinex, which the law prohibits U.S. government personnel from doing business with.

Co-sponsored by Republican Zach Nunn of Iowa and Democrat Abigail Spanberger of Virginia, the Creating Legal Responsibility for Rogue Innovators and Technology (CLARITY) Act would prohibit government officials from doing business with Chinese crypto companies and prohibit government employees from using blockchains based in China.

The bill’s writers aren’t very high-ranking members of Congress and don’t chair any influential committees. Several crypto laws, some of which address security concerns, have previously been introduced by other, more senior MPs. Some of the bills have already been approved by full House committees and are farther along in the process, making it doubtful that a new bill would be able to bypass them.

The purpose of this new rule is to prevent “foreign adversaries… from having a backdoor to access critical national security intelligence and the private information of Americans,” as stated by the legislators.

According to Nunn, a newcomer to the House this year, China’s huge investment in this infrastructure creates a massive national security and data privacy risk since “within the next decade, every American will have specific, private data stored using blockchain technology.”

Officials are also barred from doing business with Spartan Network, Conflux Network, and Red Date Technology Co., the companies responsible for designing China’s national blockchain project and the digital yuan issued by the country’s central bank.

When asked about the proposed legislation, Red Date said that the BSN Spartan Network was designed for “legacy IT,” not cryptocurrency. The company also said that any U.S. government agency was welcome to look at its source code.

“We encourage any government agency in the United States or anywhere to analyze the BSN Spartan Network’s source code and draw their own findings on the technology’s efficacy. Spartan Network is “completely separate from the BSN Networks in Mainland China,” according to a statement released by the company.

Additionally, the bill mandates that the U.S. Secretaries of the Treasury, State, and the Director of National Intelligence come up with a strategy to “avoid the risks posed by China’s and other foreign competitors’ development of blockchain technologies.”

Legislators last summer banned government workers from using the Chinese-founded social media app TikTok, which led to the new curbs. An ex-employee of ByteDance, the company that owns TikTok, filed a lawsuit in January alleging that in 2018, the Chinese Communist Party installed a hidden “backdoor” in the app so that they could track and read the messages and whereabouts of activists in Hong Kong.

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