The US-China economic cold war has been ongoing since January 2018. The main goal of the US is to stop or reduce unfair trade practices of China. As far as blockchain technology is concerned, many in the American government are wary of China-made blockchains. There have been many instances of Chinese espionage in the US. This has compelled US lawmakers to try out ways to block government officials from carrying out transactions.
Plan of US Lawmakers
The US lawmakers have introduced a bill to prohibit American federal government officials from having any business dealings with China-made blockchains. They also want to prevent them from transacting with iFinex. iFinex is currently the parent company of Tether. This may restrict the use of stablecoin USDT. The bill will also restrict officials from using Conflux Network, Spartan Network, and Red Date Technology. Red Date Technology is the main architect behind China’s national blockchain project.
US Representatives Abigail Spanberger and Zach Nunn will use provisions from the Creating Legal Accountability for Rogue Innovators and Technology (CLARITY) Act to forbid government officials from using Chinese crypto companies. Additionally, they want to disallow the use of Chinese networks linked with crypto trading platforms.
In previous years, there were some proposals to restrict government officials from using TikTok for similar reasons. TikTok is a social media platform that has roots in China. Many lawmakers fear that using Chinese apps and cryptocurrency exchange platforms will endanger vital information. It may also pose a grave cybersecurity challenge.
Security Concerns of China-made Blockchains
The latest legislation aims to ensure that the country’s foreign enemies do not have any backdoor access to critical information. For political reasons, the US government considers China as a major enemy. The transparency and traceability feature of blockchain technology enhances security levels for crypto transactions but can also be a major security risk. Data privacy problem further makes the national security problem more complicated. In the US, blockchain technology may have applications beyond the cryptocurrency domain. This is because it has huge potential in IoT, manufacturing, education, healthcare, and insurance. Therefore, if the US does not do anything to restrict government officials from using China-made blockchain technology, then it may become uncontrollable in the future.
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Bottom Line
The ongoing trade war between the US and China is not going to end soon. The proposals of the American lawmakers are an indication that it may intensify further. However, it is still a riddle as to how far the legislation can actually work. This is because blockchain technology knows no geographical boundaries. Cryptocurrency transactions can take place even if a particular crypto exchange is blocked or restricted since there are many alternatives. The US instead should target or blacklist particular Chinese companies in the bill to empower its national security interests.
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