A bipartisan bill introduced in the U.S. House last week seeks to limit the federal government’s acquisition and application of blockchain technologies. These technologies are associated with the Chinese Communist Party and other foreign enemies, thereby giving rise to worries over national security.

On November 8, Representatives Zach Nunn (R-Iowa) and Abigail Spanberger (D-Va.) presented the bill, emphasizing that it would address cybersecurity issues related to Chinese government-affiliated technology companies.

Nunn highlighted the severe concerns about data privacy and national security that come with China’s significant investment in blockchain technology. He said the bipartisan proposal is essential to stop the US government from unintentionally giving China access to critical national security intelligence and private US citizen data.

The Reason For the Bipartisan Bill Against Blockchain Technology

A 2023 Bipartisan Bill Introduced in the House Against Chinese-Linked Blockchain Technology

Spanberger emphasized how important the law is to provide a wall between the federal government and blockchain technology that the Chinese Communist Party owns. The aim is to ensure the country’s competitiveness and counterbalance the party’s influence in the global economy.

It is against the proposed legislation for federal agencies to obtain, extend, or renew contracts for “covered distributed ledger technology and blockchain equipment or services.” The bill expressly names five businesses that could not provide blockchain technologies or services to the US government. One such company includes iFinex Inc., the parent firm of the stablecoin, Tether.

Congress would receive a detailed report from the Secretary of the Treasury, the Secretary of State, and the Director of National Intelligence within 180 days of the bill’s passage.

In particular, the report would evaluate the risks of using the SWIFT payments system to avoid international and U.S. sanctions, among other hazards related to the technology and services covered.

Original Issues About China’s Technology

A 2023 Bipartisan Bill Introduced in the House Against Chinese-Linked Blockchain Technology

Legislators from both parties have voiced worries in recent years regarding Chinese-made technology‘s illegal access to intellectual property, personal data, and vital infrastructure services. Events like the TikTok scandal and the government’s inability to identify Chinese-made components in the American electrical system have raised these concerns.

The bill’s supporters contend that the hazards connected with foreign ownership of well-known apps are outweighed by the possible vulnerabilities presented by blockchain technologies, notwithstanding the federal government’s efforts to prohibit TikTok use on official devices.

Representative Nunn emphasized the need for swift action, claiming that delaying action may lead to a national security catastrophe that would far outweigh the worries over China’s control of TikTok.

In conclusion, this bill intends to safeguard sensitive information and critical infrastructure from potential risks associated with foreign influence or control.

Such legislation might reflect a broader trend where governments seek to balance the benefits of emerging technologies like blockchain with the need to protect their interests. To form a comprehensive conclusion, one must evaluate the bill’s specific provisions and understand its potential impact on technological innovation. One must also consider the geopolitical landscape as it will be essential in forming a comprehensive conclusion on its implications for government agencies and the broader society.