Cryptocurrency and Financial Crime in Myanmar: A Key to Economic Independence?

Despite recent cryptocurrency scandals, Myanmar’s resistance forces have much to gain from pushing towards fintech’s frontiers. The country’s National Unity Government (NUG) should try again to issue a U.S. dollar-backed cryptocurrency, as economic independence would further fuel the momentum of their recent victories and free the people from the military junta’s authoritarian grip.

The Current State of Myanmar’s Economy

The Central Bank of Myanmar (CBM) is using its monetary policy to fund human rights abuses, with administrative controls requiring the expedient exchange of all foreign currencies to Myanmar’s kyat at an overvalued “official” rate. This benefits only the regime and its cronies, who then use these dollars to purchase weapons from neighboring countries.

• The CBM’s actions are a form of economic oppression, which only serves to further entrench the military junta’s power. • The international community is forced to nurture political friendships with the junta, even through clandestine cash transactions can be reined in with interest rate hikes.

The Role of Cryptocurrencies in Challenging Oppressive Monetary Regimes

Cryptocurrencies have emerged as an effective response to oppressive monetary regimes worldwide. When Venezuela outlawed foreign currencies, citizens turned to crypto to shelter themselves from inflation and government control. Similarly, in Ukraine, Lebanon, Zimbabwe, and Argentina, people used cryptocurrencies to evade banking restrictions.

• Cryptocurrencies offer a way for individuals to maintain financial independence and autonomy, even in the face of oppressive monetary regimes. • The use of cryptocurrencies can help to circumvent authoritarian controls and promote economic freedom.

Myanmar’s Demand for Kyat Alternatives

Myanmar traders are already evading CBM controls through informal hundi money transfer channels, signaling a demand for kyat alternatives. Even the NUG has approved Tether cryptocurrency as legal tender, suggesting a broader trend towards cryptocurrency use in Myanmar.

• The growing demand for alternative currencies highlights the need for a viable and independent monetary system. • Cryptocurrencies can help to meet this demand and promote economic freedom in Myanmar.

Challenges and Opportunities

Blockchains eliminate the need to design, print, and transport banknotes, making them a tool for monetary independence. However, recent scandals highlight the need for stable value, which can be achieved by pegging currencies to a fixed exchange rate or backing them with real resources such as gold, jade, rubies, or oil.

• The NUG’s willingness to issue a new currency backed by foreign dollars rather than Myanmar’s own resources betrays the spirit of the people. • Issuing a new, independent currency would free the people from relying on the junta’s money for survival and demonstrate the NUG’s commitment to representing the people’s interests.

Conclusion

As the junta’s brutal tactics have only strengthened the Myanmar people’s resolve for freedom, it is time for the NUG to give them a genuinely independent monetary system: a new currency backed by real value. By issuing a cryptocurrency backed by foreign dollars, the NUG can help to promote economic independence and further fuel the momentum of their recent victories.