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Senators Draft Bill to Ban Use of Digital Yuan in US-Based Mobile Apps

30 points by DocFeind 4y ago

lalaland1125 4y ago
Terrible bill written by the typical set of tech ignorant senators. The digital yuan is basically a bank with a nice API and should be treated similarly. The real solution is to fix our financial system so that transferring USD is cheap, fast and easily done through an API.
- esahione 4y ago
  It's not about technology. It's about the monopoly of the government as it relates to taxation and money over its land. China would do the same.
  - xster 4y ago
    It does. US dollar purchase is subject to an annual limit per person.
    - trompetenaccoun 4y ago
      It's not USD purchase specifically, it's exchanging your RMB for any foreign currency that's restricted. The Communist Party keeps people's money hostage and the reason is very clear: The rich obviously do not trust that they're safe. There is no rule of law, you can be arbitrarily locked up and have your savings taken from you at any time. All it takes for example is a change in leaders, as the Xi purge has shown. So they take their money abroad. To Canada, to the US, the UK and elsewhere. The bill is probably needed but this is a bad look for the US whichever way you view it. I could go into long details but in short the situation we have now with increasing trade restrictions, stock delistings and so forth is the culmination of catastrophically failed policy towards the Chinese regime. The US and other developed countries were completely wrong and naive in the way they dealt with China. In fairness, in the 80s and 90s no one could have foreseen the current development and it was a reasonable assumption that with economic growth the country would liberalize. Even under Hu/Wen, I can see how people could convince themselves into believing increasing economic ties would make things better. Although already back in the late 2000s it was clear that the promise to open up the markets was a lie that never happened. Foreign ownership continued to be restricted, companies were forced into joint ventures (aka "thanks for the blueprints, suckers"), the Yuan control actually got tighter... Western countries plus Japan, Korea and Taiwan made the Communist Party rich and powerful. Without all that foreign investment and technology transfer Mainland China would still be a broken backwater. Corporations in the developed world had gold glittering in their eyes when they looked at China and it's massive population. The Chinese regime found that one fatal flaw in free market capitalist systems: While economically they work, there is no incentive for the corporate leadership to do what's best for the country. Those who spearheaded the outsourcing of jobs and factories profited massively. As did the shareholders initially. It only came at the cost of the future of all the less wealthy people in the respective countries. Plus now they have a nuclear power pouring more and more billions into their military, preparing for war, while running concentration camps and allying with Russia and Iran.
- toomuchtodo 4y ago
  Currency controls are the purview of nation states. Sometimes preventing the currency from leaving, sometimes from using the currency of an adversary. The digital yuan is a form of Chinese soft power projection (as the US dollar is similarly), and it's not entirely unreasonable to dissuade its use (depending on your geopolitical views).
  - satao 4y ago
    right. but then when other countries want to get away from the us dollar they are either invaded or sanctioned to hell.
    - car_analogy 4y ago
      That doesn't make not wanting to come under China's soft power any less rational. "You invaded someone else therefore you should allow yourself to be invaded."
    - PKop 4y ago
      You seem to be implying being hypocritical isn't the optimal geopolitical strategy. Akin to saying, "it's bad when you do things that make you powerful, but good when we do them" which is unquestionably true from the perspective of any individual great power.
    - ben_w 4y ago
      Yes, because the people in charge the dollars take the geopolitical view that dollars are better than every other currency. (One reason I could never be a politician is that I can’t empathise with nationalism like that; I recognise it, but it feels a bit dirty to me).
      - car_analogy 4y ago
        That's not nationalism - that's imperialism.
  - rmbyrro 4y ago
    The US Dollar is quite a strong power projection tool. They can shut a country financial system down at any moment. I bet they are afraid of being victims of what they know it's possible with such powers.
- keyeug555 4y ago
  I don’t know all the details about digital yuan but USA has enjoyed an exorbitant luxury by being the world’s reserve currency. I can see how senators with more political and macro economic experience than I would favor this ban. I’m curious to learn what the realpolitik behind this really is.
- jessaustin 4y ago
  Are these the same geniuses who "attacked" RUB? They "damaged" it so much it's up 25% over USD this year and the central bank has had to slash interest rates... I'm sure the Chinese are very concerned. https://www.nytimes.com/2022/05/26/business/russia-rates-ruble.html https://www.nytimes.com/2022/05/26/business/russia-rates-rub...
  - sebzim4500 4y ago
    Yeah but no one is allowed to sell it.
    - jessaustin 4y ago
      ...no one is allowed to sell it. Temporarily true in certain jurisdictions, but OTOH one may with RUB purchase oil, natural gas, palladium, nickel, copper, steel, aluminum, wheat, fertilizer, etc. So, those who need e.g. catalytic converters, especially if they live on the 70% of the planet where there are no limits on RUB whatsoever, will probably continue to use it.
    - somenameforme 4y ago
      The currency controls have been repeatedly loosened, though it's difficult to try to find what the latest rules are. Russia's now growing concerned that the Ruble is growing too strong. That can hurt exports and exporters, as it means [relatively] higher domestic costs + lower profits.
- toss1 4y ago
  If you think it is nothing more than a "bank with a nice API", I've got some oceanfront property in Kansas to sell you. It is a specific CCP initiative to project power and track both its citizens and foreigners and undermine the power of western democracies and the power of the Euro and Dollar. We were fools to not resist the offer to give away strategic manufacturing technologies and capabilities to China in exchange for cheap labor and a few quarters of profit. We'd be even greater fools to allow this next camel's nose under the tent (Fool me once, shame on you, fool me twice, shame on me...). Even if the senators are typically Luddites, this is a very good move and cannot happen soon enough.
- RappingBoomer 4y ago
  the american elites wanna keep americans on the low-interest plantation of america
xster 4y ago
America innovated rather than banned its way to the top in the last century
- mensetmanusman 4y ago
  The west has learned how easy it is for China to take advantage of price arbitrage. This is especially true when they block access to their market for the thing being competed. For example, some of my colleagues used to work at US solar companies before they all collapsed due to the market being flooded by below cost Chinese panels. If a country‘s government is willing to back technology below cost (or by blocking their market only for competitors), that is an appropriate place for tariffs or banning.
  - zardo 4y ago
    I don't get the idea that China subsidizing solar panel manufacturing is bad. Rather, the U.S. failure to do so is bad.
    - rmbyrro 4y ago
      Government subsidies almost always leads to inefficient capital and labor allocations, which create waste.
      - zardo 4y ago
        Almost is doing a lot of work there
      - TrapLord_Rhodo 4y ago
        >inefficient capital and labor allocations, which create waste. You can thank this 'inefficient capital' to almost all modern innovations. In reality, the US System has evolved to be no different than China, only slightly more people have their hand in the pot in the US. We also heavily subsidize electric energy production, manufacturing and all other manners of industry. We just don't allow sweat shops in manufacturing anymore, only tech.
hunglee2 4y ago
'your freedoms must be protected by restricting you from exercising those freedoms' bill
- athrowaway3z 4y ago
  the freedom argument is not without some irony regarding the Digital Yuan.
- TrapLord_Rhodo 4y ago
  Every government historically becomes an entity in it's own right. Government rights slowly become more important than citizens rights.
outside1234 4y ago
Given the Russian shitshow, we can't take any more dependencies on China, and honestly need to start unwinding the ones we have. So I'm all for this.
corner_case2 4y ago
This, on top of the covid shitshow in China, will stifle the Chinese economy for decades. They might even drop to #3.
- rmbyrro 4y ago
  Sure, yeah, the Japanese will produce 5x more stuff the next year. Prepare to see Made in Japan in everything you buy. Oh, and every item will also cost 5x more. But it's just a detail... Cheers!
  - bboygravity 4y ago
    You mean a USB cable will cost 2,50 instead of 50 cents and will last longer than 1 use and will be made out of materials that don't cause cancer and neurotoxicity and my purchase will not be sponsoring a world-war-hungry genocidal regime? oh noes!
- helen___keller 4y ago
  In what world does this even affect the Chinese economy? We’re talking about restricting Chinese payment apps from American app stores. The Chinese economy is driven by users who have access to the Chinese app stores
helen___keller 4y ago
> prohibit app stores from hosting apps that enable transactions in China’s digital yuan I think it would be reasonable to restrict usage of digital yuan by US businesses, but complete deplatforming seems annoying I get that “China bad” is a popular position, but all you’re doing is punishing Americans who might want to travel to China or interact with Chinese friends (or worse: force those Americans to buy Chinese phones to avoid the deplatforming)
- alaricus 4y ago
  > I get that “China bad” is a popular position America needs a new bogeyman now that Muslims are not scary anymore.
  - rootusrootus 4y ago
    It helps that the CCP routinely does things worth despising them for.
    - epgui 4y ago
      Every government routinely does things worth criticism. I don’t mean to do moral equivocation between all possible different wrongs, but some wrongs do get amplified way more than other comparable wrongs.
    - droptablemain 4y ago
      This is true of all governments, but the CCP does far more good for China that the U.S. government does for the U.S.
      - throwaway29812 4y ago
        Are you including the prison camps for millions of their own citizens in that equation?
        hunglee2 4y ago
metacritic12 4y ago
Would this make the Digital Yuan more banned than Terra or Ethereum? That would show the true colors of how much of America's liberalism (e.g. free markets) is conditional on free markets being favorable for American hegemony.
jimbob45 4y ago
I don’t understand what a CBDC is. To the best of my knowledge, it seems like money that is backed by a SQL DB in DC or Beijing rather than paper with anti-counterfeiting measures. It sure seems a lot harder to trust that a CBDC wouldn’t be abused than a cash-based system, which at least has a paper trail (literally).
TrapLord_Rhodo 4y ago
As long as everyone agrees on a global form of payment (USD) with swift and a 'Friendly?' globalistic enviroment there will continue to be no need for crypto. However as we start to see fragmentation in the payment space between Russia, China and the EU/US along with an explicit writing in the transactions to disallow crosstalk, there start to be some kind of 'use' for crypto again. The need for a verifiable, self-soverign, uncontrollable medium of exchange starts to become useful again. Problems with the above: Low liquidity, uncontrollable is a loose term here. If the US forces publicly traded companies to dump crypto it will cause a huge crypto winter and a huge amount of money to be 'eaten up' by the bulls.

30 points by DocFeind 4y ago

Terrible bill written by the typical set of tech ignorant senators. The digital yuan is basically a bank with a nice API and should be treated similarly. The real solution is to fix our financial system so that transferring USD is cheap, fast and easily done through an API.

esahione 4y ago
It's not about technology. It's about the monopoly of the government as it relates to taxation and money over its land. China would do the same.
- xster 4y ago
  It does. US dollar purchase is subject to an annual limit per person.
  - trompetenaccoun 4y ago
    It's not USD purchase specifically, it's exchanging your RMB for any foreign currency that's restricted. The Communist Party keeps people's money hostage and the reason is very clear: The rich obviously do not trust that they're safe. There is no rule of law, you can be arbitrarily locked up and have your savings taken from you at any time. All it takes for example is a change in leaders, as the Xi purge has shown. So they take their money abroad. To Canada, to the US, the UK and elsewhere. The bill is probably needed but this is a bad look for the US whichever way you view it. I could go into long details but in short the situation we have now with increasing trade restrictions, stock delistings and so forth is the culmination of catastrophically failed policy towards the Chinese regime. The US and other developed countries were completely wrong and naive in the way they dealt with China. In fairness, in the 80s and 90s no one could have foreseen the current development and it was a reasonable assumption that with economic growth the country would liberalize. Even under Hu/Wen, I can see how people could convince themselves into believing increasing economic ties would make things better. Although already back in the late 2000s it was clear that the promise to open up the markets was a lie that never happened. Foreign ownership continued to be restricted, companies were forced into joint ventures (aka "thanks for the blueprints, suckers"), the Yuan control actually got tighter... Western countries plus Japan, Korea and Taiwan made the Communist Party rich and powerful. Without all that foreign investment and technology transfer Mainland China would still be a broken backwater. Corporations in the developed world had gold glittering in their eyes when they looked at China and it's massive population. The Chinese regime found that one fatal flaw in free market capitalist systems: While economically they work, there is no incentive for the corporate leadership to do what's best for the country. Those who spearheaded the outsourcing of jobs and factories profited massively. As did the shareholders initially. It only came at the cost of the future of all the less wealthy people in the respective countries. Plus now they have a nuclear power pouring more and more billions into their military, preparing for war, while running concentration camps and allying with Russia and Iran.
toomuchtodo 4y ago
Currency controls are the purview of nation states. Sometimes preventing the currency from leaving, sometimes from using the currency of an adversary. The digital yuan is a form of Chinese soft power projection (as the US dollar is similarly), and it's not entirely unreasonable to dissuade its use (depending on your geopolitical views).
- satao 4y ago
  right. but then when other countries want to get away from the us dollar they are either invaded or sanctioned to hell.
  - car_analogy 4y ago
    That doesn't make not wanting to come under China's soft power any less rational. "You invaded someone else therefore you should allow yourself to be invaded."
  - PKop 4y ago
    You seem to be implying being hypocritical isn't the optimal geopolitical strategy. Akin to saying, "it's bad when you do things that make you powerful, but good when we do them" which is unquestionably true from the perspective of any individual great power.
  - ben_w 4y ago
    Yes, because the people in charge the dollars take the geopolitical view that dollars are better than every other currency. (One reason I could never be a politician is that I can’t empathise with nationalism like that; I recognise it, but it feels a bit dirty to me).
    - car_analogy 4y ago
      That's not nationalism - that's imperialism.
- rmbyrro 4y ago
  The US Dollar is quite a strong power projection tool. They can shut a country financial system down at any moment. I bet they are afraid of being victims of what they know it's possible with such powers.
keyeug555 4y ago
I don’t know all the details about digital yuan but USA has enjoyed an exorbitant luxury by being the world’s reserve currency. I can see how senators with more political and macro economic experience than I would favor this ban. I’m curious to learn what the realpolitik behind this really is.
jessaustin 4y ago
Are these the same geniuses who "attacked" RUB? They "damaged" it so much it's up 25% over USD this year and the central bank has had to slash interest rates... I'm sure the Chinese are very concerned. https://www.nytimes.com/2022/05/26/business/russia-rates-ruble.html https://www.nytimes.com/2022/05/26/business/russia-rates-rub...
- sebzim4500 4y ago
  Yeah but no one is allowed to sell it.
  - jessaustin 4y ago
    ...no one is allowed to sell it. Temporarily true in certain jurisdictions, but OTOH one may with RUB purchase oil, natural gas, palladium, nickel, copper, steel, aluminum, wheat, fertilizer, etc. So, those who need e.g. catalytic converters, especially if they live on the 70% of the planet where there are no limits on RUB whatsoever, will probably continue to use it.
  - somenameforme 4y ago
    The currency controls have been repeatedly loosened, though it's difficult to try to find what the latest rules are. Russia's now growing concerned that the Ruble is growing too strong. That can hurt exports and exporters, as it means [relatively] higher domestic costs + lower profits.
toss1 4y ago
If you think it is nothing more than a "bank with a nice API", I've got some oceanfront property in Kansas to sell you. It is a specific CCP initiative to project power and track both its citizens and foreigners and undermine the power of western democracies and the power of the Euro and Dollar. We were fools to not resist the offer to give away strategic manufacturing technologies and capabilities to China in exchange for cheap labor and a few quarters of profit. We'd be even greater fools to allow this next camel's nose under the tent (Fool me once, shame on you, fool me twice, shame on me...). Even if the senators are typically Luddites, this is a very good move and cannot happen soon enough.
RappingBoomer 4y ago
the american elites wanna keep americans on the low-interest plantation of america

xster 4y ago

America innovated rather than banned its way to the top in the last century

mensetmanusman 4y ago
The west has learned how easy it is for China to take advantage of price arbitrage. This is especially true when they block access to their market for the thing being competed. For example, some of my colleagues used to work at US solar companies before they all collapsed due to the market being flooded by below cost Chinese panels. If a country‘s government is willing to back technology below cost (or by blocking their market only for competitors), that is an appropriate place for tariffs or banning.
- zardo 4y ago
  I don't get the idea that China subsidizing solar panel manufacturing is bad. Rather, the U.S. failure to do so is bad.
  - rmbyrro 4y ago
    Government subsidies almost always leads to inefficient capital and labor allocations, which create waste.
    - zardo 4y ago
      Almost is doing a lot of work there
    - TrapLord_Rhodo 4y ago
      >inefficient capital and labor allocations, which create waste. You can thank this 'inefficient capital' to almost all modern innovations. In reality, the US System has evolved to be no different than China, only slightly more people have their hand in the pot in the US. We also heavily subsidize electric energy production, manufacturing and all other manners of industry. We just don't allow sweat shops in manufacturing anymore, only tech.

hunglee2 4y ago

'your freedoms must be protected by restricting you from exercising those freedoms' bill

athrowaway3z 4y ago
the freedom argument is not without some irony regarding the Digital Yuan.
TrapLord_Rhodo 4y ago
Every government historically becomes an entity in it's own right. Government rights slowly become more important than citizens rights.

outside1234 4y ago

Given the Russian shitshow, we can't take any more dependencies on China, and honestly need to start unwinding the ones we have. So I'm all for this.

corner_case2 4y ago

This, on top of the covid shitshow in China, will stifle the Chinese economy for decades. They might even drop to #3.

rmbyrro 4y ago
Sure, yeah, the Japanese will produce 5x more stuff the next year. Prepare to see Made in Japan in everything you buy. Oh, and every item will also cost 5x more. But it's just a detail... Cheers!
- bboygravity 4y ago
  You mean a USB cable will cost 2,50 instead of 50 cents and will last longer than 1 use and will be made out of materials that don't cause cancer and neurotoxicity and my purchase will not be sponsoring a world-war-hungry genocidal regime? oh noes!
helen___keller 4y ago
In what world does this even affect the Chinese economy? We’re talking about restricting Chinese payment apps from American app stores. The Chinese economy is driven by users who have access to the Chinese app stores

helen___keller 4y ago

> prohibit app stores from hosting apps that enable transactions in China’s digital yuan I think it would be reasonable to restrict usage of digital yuan by US businesses, but complete deplatforming seems annoying I get that “China bad” is a popular position, but all you’re doing is punishing Americans who might want to travel to China or interact with Chinese friends (or worse: force those Americans to buy Chinese phones to avoid the deplatforming)

alaricus 4y ago
> I get that “China bad” is a popular position America needs a new bogeyman now that Muslims are not scary anymore.
- rootusrootus 4y ago
  It helps that the CCP routinely does things worth despising them for.
  - epgui 4y ago
    Every government routinely does things worth criticism. I don’t mean to do moral equivocation between all possible different wrongs, but some wrongs do get amplified way more than other comparable wrongs.
  - droptablemain 4y ago
    This is true of all governments, but the CCP does far more good for China that the U.S. government does for the U.S.
    - throwaway29812 4y ago
      Are you including the prison camps for millions of their own citizens in that equation?
      - hunglee2 4y ago

metacritic12 4y ago

Would this make the Digital Yuan more banned than Terra or Ethereum? That would show the true colors of how much of America's liberalism (e.g. free markets) is conditional on free markets being favorable for American hegemony.

jimbob45 4y ago

I don’t understand what a CBDC is. To the best of my knowledge, it seems like money that is backed by a SQL DB in DC or Beijing rather than paper with anti-counterfeiting measures. It sure seems a lot harder to trust that a CBDC wouldn’t be abused than a cash-based system, which at least has a paper trail (literally).

TrapLord_Rhodo 4y ago

As long as everyone agrees on a global form of payment (USD) with swift and a 'Friendly?' globalistic enviroment there will continue to be no need for crypto. However as we start to see fragmentation in the payment space between Russia, China and the EU/US along with an explicit writing in the transactions to disallow crosstalk, there start to be some kind of 'use' for crypto again. The need for a verifiable, self-soverign, uncontrollable medium of exchange starts to become useful again. Problems with the above: Low liquidity, uncontrollable is a loose term here. If the US forces publicly traded companies to dump crypto it will cause a huge crypto winter and a huge amount of money to be 'eaten up' by the bulls.