US Senate passes bill to create new technology sector with blockchain as main focus, invests over $200 billion to "counter China"

According to the Financial Times, on Tuesday evening Eastern Time, the U.S. Senate passed the Endless Frontier Act, a bipartisan bill aimed at responding to China's recent technological efforts by creating a new technology department with blockchain as its main focus.

The bill, sponsored by Senate Majority Leader Chuck Schumer, D-N.Y., passed Tuesday night by a vote of 68 to 32. It now goes to the House, where Rep. Ro Khanna, D-Calif., has introduced a counterpart.

The bill lists distributed ledger technology and cybersecurity as one of 10 “critical technology focus areas,” according to an amendment by Sen. Cynthia Lummis, R-Wyo. Lummis’s amendment increases the number of focus areas to 11 to add distributed ledger technology to the priority list.

Other provisions of the bill target issues such as semiconductor production, artificial intelligence, biotechnology, communications and energy efficiency. The words “blockchain” and “cryptocurrency” do not appear in the bill.

The bill reportedly aims to invest more than $200 billion in U.S. technology, science and research to counter China's growing influence.

The bill says the new Department of Technology and Innovation will strengthen U.S. leadership in key technologies, improve education in key focus areas and hopefully attract more students to those fields.

In addition to providing huge investments in technology, the bill also includes a series of measures to restrict China. One is to prohibit government agencies from purchasing drones made by Chinese companies, including DJI, the world's largest commercial drone manufacturer. In addition, federal employees will be prohibited from downloading the popular short video app TikTok to government electronic devices.

Senior White House official Kurt Campbell said on Tuesday that the legislation was a key part of Washington's efforts to improve its competitiveness as part of a broader strategy to deal with China.

"This bill demonstrates that the new barriers to competition that will define American leadership will increasingly emerge in technology, and we are determined to take steps to accelerate the pace," he said.

While the bill passed the Senate easily, a major debate is expected in the House over how the two chambers can combine their respective legislation into one package.

“This is a national security issue, and if the United States does not respond, we will be left behind,” Lummis said. “This bill will advance our research and development efforts in blockchain and financial innovation, which we desperately need.”