U.S. Representative Zach Nunn (IA-03) introduced bipartisan legislation on Wednesday to combat China, prevent cyberattacks, and protect U.S. intellectual property. The Creating Legal Accountability for Rogue Innovators and Technology (CLARITY) Act would prohibit the federal government from utilizing blockchain technology developed by China and other foreign adversaries to ensure these countries do not have a backdoor to access critical national security intelligence and Americans’ private information. The bill is co-led by U.S. Representative Abigail Spanberger (VA-07).
“Within the next decade, every American will have sensitive, private data stored using blockchain technology. China’s heavy investment in this infrastructure poses a colossal national security and data privacy problem. If we don’t act now, this will be a disaster 1,000 times worse than China’s ownership of TikTok,” said Rep. Nunn. “Our bipartisan bill ensures that the federal government is not giving China a backdoor to access critical national security intelligence and Americans’ private information. We must pass this bill now before it’s too late.”
The Chinese Communist Party has been investing heavily in the development of new, world-altering technologies, including artificial intelligence, quantum computing, 5G, hypersonic weapons, blockchain, distributed ledger technology, cloud computing, and more. Specifically, Chinese President Xi Jinping declared that his country should “seize the opportunities” presented by blockchain technology, and China is investing heavily towards that end by developing the Blockchain-based Service Network (BSN).
While blockchain is currently most known for its affiliation with cryptocurrencies such as bitcoin, the technology is poised to radically reshape data privacy with broad adoption across cloud storage platforms over the next decade as a way to increase security and decrease costs. U.S. utilization of the BSN, however, would expose information stored on cloud platforms to Chinese surveillance, including social security numbers, credit card numbers, passwords, photos, and other sensitive information. On the government level, the vulnerabilities are even more alarming with critical national security information and Americans’ most sensitive data potentially at risk.
“As a former CIA case officer, I understand that the Chinese Communist Party’s investment in a state-controlled blockchain network poses significant risks to U.S. data security. Xi Jinping has made blockchain a national priority — as well as maintaining control of the information hosted on their network,” said Rep. Spanberger. “The United States must have a plan in place to keep U.S. data out of the hands of our adversaries. I’m proud to join Representative Nunn in leading the bipartisan CLARITY Act to maintain a firewall between CCP-owned blockchain and the federal government, counter the Chinese Communist Party’s influence in the global economy, and keep our nation competitive.”
The CLARITY Act will protect American intellectual property, sensitive data, and national security by ensuring that the federal government takes this threat seriously and acts now with a coordinated response to counter the vulnerability before it’s too late. In short, the bill ensures that the U.S. government is not creating security risks by utilizing technological infrastructure developed by foreign adversaries.
Specifically, the CLARITY Act would:
- Prevent the government from utilizing blockchain network infrastructure, blockchain service providers, and distributed ledger technology developed by China and other foreign adversaries.
- Direct the U.S. Secretary of Treasury, Secretary of State, and the Director of National Intelligence to develop a plan to prevent the risks posed by China’s and other foreign adversaries’ development of these technologies.
Text of the bill can be found here.