Key Takeaways :
- US legislators introduce the Clarity Act amid escalating China-US tensions.
- The proposed bill seeks to prohibit federal agencies from utilizing Chinese blockchain networks, aligning with a broader strategy to uphold US digital control.
In a dynamic turn of events, U.S. Representatives Zach Nunn and Abigail Spanberger have introduced a groundbreaking piece of legislation—the Creating Legal Accountability for Rogue Innovators and Technology (CLARITY) Act. This proposed bill has significant implications, aiming to limit the involvement of the U.S. federal government in transactions with Chinese blockchain companies.
The CLARITY Act, as its name suggests, seeks to bring legal clarity to the complex intersection of technology, innovation, and international relations. Spearheaded by Representatives Nunn and Spanberger, the legislation is designed to address specific concerns related to national security and data privacy, particularly in the context of Chinese blockchain networks.
One of the central focuses of the CLARITY Act is to restrict U.S. government officials from conducting transactions involving Tether‘s USDT and various Chinese blockchain networks. The bill takes a direct aim at notable players such as Blockchain-based Service Network (BSN) and Conflux Network, both integral components of China‘s strategic approach to blockchain technology.
The proposed legislation not only prohibits government officials from engaging with Chinese crypto companies but also places limitations on the use of China-based blockchains and networks supporting cryptocurrency trading platforms by government employees. The underlying goal is to safeguard national security interests and protect foreign policy considerations.
Representatives Nunn and Spanberger argue that China’s blockchain networks, along with those associated with “unregulated, self-proclaimed ‘supra-national’ companies,” could pose potential risks to the United States. This viewpoint underscores the increasing awareness within Washington regarding the influence of Chinese entities in the global cryptocurrency landscape.
The CLARITY Act specifically targets a list of companies, including Tether’s parent company iFinex, China’s Blockchain-based Service Network (BSN), Spartan Network, Conflux Network, and Red Date Technology. These entities would face restrictions on the use of their distributed ledger technology and blockchain equipment or services by the U.S. government.
The revelation of this legislative initiative coincides with heightened scrutiny of Tether’s stablecoin assets. Concerns have been raised about Tether’s ties to Chinese firms and its undisclosed holdings of Chinese securities. The U.S. Securities and Exchange Commission (SEC) continues to closely monitor Tether’s operations, particularly its involvement in providing USDT stablecoin loans to clients.
In the coming months, the fate of the CLARITY Act will unfold, revealing its impact on the intricate web of international relations, technology regulation, and the future trajectory of blockchain innovation. Stay tuned for updates on this pivotal legislative development.