Myanmar Democracy Group Look to Tether After Failure of Myanmar Dollar Project

When the military took control of currency issuance in Myanmar in 2021, civilians reacted by using the stablecoin Tether for peer-to-peer transactions and cross-border transfers.

The stablecoin Tether has benefited from a recent military coup in Myanmar. The National Unity Government, a democratic coalition, has authorized the use of Tether in defiance of military control. Tether is a stablecoin that is linked to the US dollar.

Finance Minister Tin Tun Naing stated on Facebook:

“[Tether] has been officially recognized for domestic use to streamline services and payment system.”

This overturned a central bank notification declaring all digital assets unlawful and warned offenders with punishment.

In February 2021, the military took over the country. The National Unity Government (NUG) was founded when the military declared democratic parliament members elected in 2020 null and illegitimate. The NUG includes several previous legislative members. Tether has the potential to be a powerful weapon against the military, which currently prints the country’s fiat money.

Tether can be used for untraced transfers and as a substitute to the kyat, a fiat currency. The kyat fell precipitously from its peak of 1300 kyat to the US dollar. It plummeted to 1800 kyat to the dollar when the military took control of the nation.

In November 2021, the NUG released zero-interest bonds to fund its operations, allowing Tether to be used for bond transactions. The Myanmar diaspora was first asked to buy the bonds, which the military said breached counterterrorism regulations.

When the military seized over, public servants and bank employees went on strike as a measure of civic disobedience. This resulted in long lines at ATMs as residents hurried to withdraw cash.

An unidentified organization launched the Myanmar Dollar digital asset last year (MYD). Its goal was to free citizens by allowing them to manage their own assets without relying on a centralized money system. 55%  was to be handed to residents, with the remaining 45% going to the NUG to support new initiatives. 

The MYD ended operations in December 2021, and its website was decommissioned. According to a local IT expert, the organization “failed to build a market, and citizens endorsing the initiative were unable to receive MYD.”

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Patrick

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