Myanmar thinks about stablecoins after the failure of a digital currency
A Myanmar democratic group approved the use of Tether in an act of defiance against military rule. Tether is a stablecoin pegged to the US dollar. In a post on Facebook, Finance Minister Tin Tun Naing said that “[Tether] has been officially recognized for domestic use to simplify the services and payment system.” This effectively nullified a previous central bank warning, which declared all digital assets illegal, threatening to prosecute offenders.
The military gained control of the country in February 2021. The National Unity Government (NUG) was formed after the military voided members of the democratic parliament elected in 2020. Some former parliamentary members are members of the NUG. Tether could prove to be an effective weapon against the military who now issue the country’s fiat money.
Tether provides an avenue for unmonitored remittances and an alternative to fiat currency, the kyat. The NUG issued zero-interest bonds to finance its activities in November 2021, making it possible to use Tether for bond transactions. In fact, already last year an anonymous group created a digital asset called Myanmar Dollar (MYD), which aimed to free citizens by giving them the management of their assets without a centralized monetary system.
55% had to be distributed to citizens and 45 to the NUG to finance new initiatives. The MYD went out of business in December 2021, its website was closed. According to a local information technology expert, the group “failed to build a market and the citizens who supported the initiative were unable to receive MYD”.