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Myanmar’s Central Bank Cracks Down on Cryptocurrency Transactions

In a move aimed at regulating cryptocurrency transactions, Myanmar’s Central Bank has issued a public notice warning individuals against participating in unregulated digital currency activities. The bank has indicated its readiness to enforce regulations by closing bank accounts and pursuing legal action.

History of Regulation

The Central Bank of Myanmar (CBM) is the sole entity authorized to issue currency in Myanmar, as stipulated in the Central Bank of Myanmar Law. The existing framework prohibits all persons residing in Myanmar from engaging in digital currency transactions, including widely recognized cryptocurrencies such as Bitcoin, Litecoin, Ethereum, and Perfect Money.

May 2020: Prohibition on Digital Currency Transactions

In May 2020, the CBM issued Notification No. 9/2020 prohibiting all persons residing in Myanmar from engaging in the sale, purchase, or exchange of unregulated digital currencies. Prior to this notification, the bank had announced that anyone engaging in digital currency transactions was doing so at their own risk.

New Regulations

The new regulations introduce specific measures for regulating sustainability-related tokens, including green tokens, social tokens, sustainability tokens, and sustainability-linked tokens. These tokens are intended to offer diverse sustainability-related products to ESG funds in Thailand and drive the growth of a sustainable digital economy.

Classifications: Sustainability-related tokens are classified into four types: Green tokens, Social tokens, Sustainability tokens, and Sustainability-linked tokens.
Offering: The offering of sustainability-related tokens is subject to Thailand’s general requirements for token offerings, including approval from the SEC and filing a registration statement and draft prospectus with the SEC before marketing and offering the sustainability-related tokens to public investors in Thailand.

Thailand’s Securities and Exchange Commission Takes Action

In June 2024, Thailand’s Securities and Exchange Commission (SEC) issued four notifications amending existing regulations to recognize sustainability-related tokens. The key points in the notifications are summarized below:

Enhancements to Existing Regulations

The SEC has made several enhancements to its existing regulations, including:

Definitions: Sustainability-related tokens are classified into four types: Green tokens, Social tokens, Sustainability tokens, and Sustainability-linked tokens.
Offering: The offering of sustainability-related tokens is subject to Thailand’s general requirements for token offerings, including approval from the SEC and filing a registration statement and draft prospectus with the SEC before marketing and offering the sustainability-related tokens to public investors in Thailand.

Programmable Payments Under Scrutiny

The Bank of Thailand has announced its new Enhanced Regulatory Sandbox, which provides an opportunity to experiment with currently restricted financial innovations under a controlled environment. The bank is employing a thematic approach to determine the scope of technology or innovations that may participate in the Enhanced Regulatory Sandbox and will only accept applications in each theme for a limited period.

Conclusion

Myanmar’s Central Bank has taken steps to regulate cryptocurrency transactions, warning individuals against participating in unregulated digital currency activities. The new regulations aim to provide clarity on sustainability-related tokens and drive the growth of a sustainable digital economy in Thailand.