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Digital Currency Compliance in Myanmar: Risks and Regulations
Stricter Stance on Digital Currency Transactions
In recent months, the Central Bank of Myanmar (CBM) has taken a stricter stance on digital currency transactions within the country’s borders. The CBM has issued public notices warning individuals against participating in unregulated digital currency sales, purchases, exchanges, or transfers.
According to the CBM, the sale, purchase, exchange, or transfer of unregulated digital currencies is prohibited under the Central Bank of Myanmar Law, Anti-Money Laundering Law, and Financial Institutions Law. The CBM has indicated its readiness to enforce regulations by closing bank accounts and pursuing legal action against individuals involved in such activities.
Background on Digital Currency Regulation
Notification No. 9/2020
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. The list of prohibited digital currencies includes Bitcoin and other cryptocurrencies not explicitly approved by the CBM.
Consequences of Non-Compliance
Individuals found guilty of violating these regulations may face fines and imprisonment. Furthermore, financial institutions that facilitate such transactions may also be subject to penalties and disciplinary action.
Regulatory Framework for Digital Currencies
Myanmar’s regulatory framework for digital currencies is still evolving, but it is clear that the CBM aims to balance innovation with financial stability and security concerns. The CBM has established a regulatory sandbox to test and evaluate new digital currency projects, including those using blockchain technology.
Key Features of the Regulatory Sandbox
- Allows approved applicants to test their products or services in a controlled environment
- Subject to certain conditions and requirements
- Unregulated digital currencies remain outside the scope of this framework and are subject to stricter regulations
Conclusion
Digital currency compliance is a rapidly evolving field, and individuals and businesses operating within Myanmar’s borders must be aware of the risks and regulations surrounding digital currency transactions. As the regulatory landscape continues to evolve, it is essential for stakeholders to stay informed about changes in the law and adapt their business practices accordingly.
The CBM’s efforts to regulate digital currencies are aimed at promoting financial stability, security, and innovation within Myanmar. While some may view these regulations as restrictive, they also serve as a necessary step towards establishing a more robust and secure financial system.