As the military seized control of the issuance of currency in Myanmar in 2021, the citizens responded by taking to the stablecoin Tether for peer-to-peer transactions and cross-border remittances.
A recent military takeover in Myanmar resulted in a win for the stablecoin Tether. The National Unity Government, a democratic group, has endorsed the use of Tether in an act of defiance against military rule. Tether is a stablecoin pegged to the U.S. dollar. In a Facebook post, Finance Minister Tin Tun Naing said that “[Tether] has been officially recognized for domestic use to streamline services and payment system.” This repealed a notice from the central bank, declaring all digital assets illegal, threatening prosecution to violators.
The military wrested control of the country in Feb. 2021. The National Unity Government (NUG) was formed after the military rendered null and void democratic parliament members elected in 2020. Some former parliamentary members are part of the NUG. Tether could prove an effective weapon against the military that now issues the country’s fiat money.
Tether provides an avenue for unmonitored remittances and, as an alternative to the fiat currency, the kyat. The kyat dropped sharply from its height of 1300 kyat to the U.S. dollar. Once the military seized control of the country, it fell to 1800 kyat to the dollar.
Tether used for bond transactions
The NUG issued zero-interest bonds to bankroll its activities in Nov. 2021, making it possible for Tether to be used for the bond’s transactions. The Myanmar diaspora was initially called upon to purchase the bonds, in a move that the military said violated counterterrorism laws.
Civil servants and bank employees downed tools as a form of civil protest when the military took over. This meant queues outside ATMs as citizens rushed to withdraw money.
Myanmar dollar experiment unsuccessful
Last year, an anonymous group created a digital asset called the Myanmar Dollar (MYD). It aimed to liberate citizens by giving them management of their own assets without a centralized currency system. Fifty-five percent was meant to be distributed to citizens and 45% to the NUG to fund new ventures. The MYD ceased operation in Dec. 2021, its website shut down. According to a local information technology expert opined that the group “failed to build a market, and citizens endorsing the initiative were not able to receive MYD.”