A bill to prohibit money services businesses from engaging in any transaction that involves a central bank digital currency issued by the People's Republic of China, and for other purposes.

Overview

S. 4601, introduced in the 119th Congress and referred to the Senate Committee on Banking, Housing, and Urban Affairs, is a proposed statute targeting money services businesses (MSBs) and their involvement in transactions related to a central bank digital currency (CBDC) issued by the People’s Republic of China. The bill has at least one co-sponsor, Senator Rick Scott.

Purpose and intent

• To prohibit money services businesses from engaging in any transaction that involves a CBDC issued by the PRC.
• The underlying aim appears to be mitigating potential financial risk, sanctions evasion, national security concerns, or alleged influence associated with a Chinese CBDC by restricting U.S. MSBs from handling such digital currency.

Key provisions (as described)

• Prohibition: MSBs are barred from facilitating, enabling, or conducting any transaction that involves the PRC-issued CBDC.
• Scope of entities: The restriction applies specifically to money services businesses operating under U.S. jurisdiction.
• Transactions: The prohibition covers any transaction of the type conducted by MSBs, which may include money transfers, currency exchanges, remittances, and related services typically provided by MSBs.
• Compliance and enforcement framework: While not fully detailed in the summary, the bill would likely establish enforcement mechanisms, penalties, and reporting requirements for MSBs that violate the prohibition.
• Administrative and regulatory alignment: The bill would interact with existing regulatory regimes governing MSBs, possibly requiring regulators to issue guidance, rules, or certifications to ensure compliance.

Affected parties and impact

• Directly affected: Money services businesses operating in or serving customers within the United States.
• Indirect effects: Customers and counterparties of MSBs who use or rely on transactions involving the PRC CBDC, as well as financial institutions that interact with MSBs.
• National security and policy dimension: The bill aligns with broader U.S. policy objectives related to technology, currency sovereignty, and countering potential financial channels associated with a foreign CBDC.

Procedural and timeline notes

• Introduction: The bill was introduced in the Senate and assigned to the Committee on Banking, Housing, and Urban Affairs.
• Action to date: Read twice and referred to the committee (as of 2026-05-20).
• Next steps: Committee consideration, potential markup, and floor consideration if the committee advances the bill. Additional amendments or changes could be proposed during committee or on the Senate floor.

Potential considerations and questions

• Definition scope: How the bill defines “money services business” and what specific transaction types are encompassed.
• Compliance burden: The administrative burden on MSBs to screen for PRC CBDC involvement and how to verify compliance.
• Exceptions: Whether there are any carve-outs (e.g., incidental holdings, interoperability tests, or certain cross-border flows).
• Enforcement and penalties: Details on penalties for violations, enforcement agency roles, and due process protections.
• Interplay with existing sanctions and currency controls: How this measure interacts with other U.S. financial sanctions regimes and sanctions programs.

Summary

S. 4601 proposes a targeted prohibition on U.S.-based money services businesses engaging in any transaction involving a central bank digital currency issued by the People’s Republic of China. The bill seeks to restrict MSB activities related to this specific foreign CBDC, with the aim of addressing perceived security and policy concerns. The bill is in early procedural stages, having been introduced and referred to the Senate Banking Committee, where further action would determine its viability and scope.