We're Live Bangla Monday, May 16, 2022

Myanmar's pro-democracy forces resist with cryptocurrency

Tether Emerges As Potential Savior For People Seeking Freedom Over Their Assets

The NUG is letting citizens use Tether because its greater use could weaken the power of the military. (Source photo by Reuters and Tether website)

BANGKOK/YANGON -- Myanmar's National Unity Government, a pro-democracy group, recently announced that it officially endorses domestic distribution of the cryptocurrency Tether in a move to resist Myanmar's military, which seized control of the country last February, using fintech.

Tether is issued by a Hong Kong company, Tether Ltd. It is a blockchain-based cryptocurrency whose value is pegged to the dollar.

The NUG, established in April by pro-democracy members of parliament who won seats in the 2020 election that the military has nullified, has continued to criticize the military and resist it, using force in some regions. It is not powerful enough to take back control of the country but enjoys strong support from citizens.

The NUG is letting citizens use Tether because its greater use could weaken the power of the military, which controls the issuance of the country's currency.

Tether offers Myanmar citizens the advantage of being able to make transactions or remit money without having to worry about being monitored or obstructed by the authorities.

People line up outside a bank branch in Yangon after the military takeover in February 2021.   © Reuters

"Suppose a majority of the citizens will come to use a cryptocurrency regularly," a Yangon-based business consultant said. "It may make money into pieces of paper, no matter how many bills the central bank prints."

Last year, a project called Myanmar Dollar (MYD) by an anonymous group attracted people's attention. It was aimed at securing the freedom of managing assets for all citizens without using a centralized currency system. The plan was to issue the namesake cryptocurrency locally, of which 55% was to be distributed to citizens and the remaining 45% was to be allotted to the NUG and charities to fund their activities.

Read Also: Hearings on rohingya genocide case set for february at world court

However, MYD stopped operation in December, and its website was closed. A local information technology expert said the group "failed to build a market, and citizens endorsing the initiative were not able to receive MYD."

By contrast, Tether is an existing cryptocurrency established as a means of making transactions globally. Its use in Myanmar is not officially approved, but private transactions between individuals are unlikely to be noticed by the authorities.

NUG began issuing zero-interest bonds to fund its activities in November and recently allowed the use of Tether for the bonds' transactions.

Furthermore, Tether is seen as likely to be supported by a declining confidence in the kyat, Myanmar's currency. About 1,300 kyat could buy a dollar in January 2021, but the currency fell sharply after the military took control of the government.

The central bank's reference rate for Myanmar's currency is currently around 1,800 kyat to the dollar, but the currency goes for 1,900 kyat per dollar at money changers. Many citizens who have assets have rushed to sell kyat for dollars.

The kyat had been an inconvenient currency in the first place. Immediately after the military takeover, a "civil disobedience movement," in which civil servants and bank workers walked out as a form of protest against the military, gained momentum.

As a result, bank counters were closed, which prompted people to queue in front of ATMs to withdraw their money. Banks reopened around May but put a limit on the amount that could be withdrawn, for fear of potential nonstop outflows of deposits. Most ATMs remain suspended.

Methods of protest against the military have become more sophisticated as available technology has advanced. One cannot deny the possibility that crypto-assets may be added to the arsenal of citizens in time.