To raise funds to overthrow the military regime, the pro-democracy opposition has adopted cryptocurrency as its official currency.
The National Unity Government is a parallel regime that supports ousted leader Aung San Suu Kyi and will accept the digital currency Tether as its official currency.
It also plans to raise $1bn (£750m), in bonds, as a government-in-exile. A crowdfunding campaign has been launched to secure funds for military resistance from its global diaspora.
Tin Tun Naing, the opposition finance minister, stated on Facebook that Tether, a stablecoin linked to the dollar’s price, would be accepted domestically for payment.
Stablecoins are linked to traditional currencies so that cryptocurrency enthusiasts can claim they can be used for regular payments, without the volatile price swings of Bitcoin.
The central bank of Myanmar had previously declared that all digital currencies were illegal. This was despite the threat to prison and fines.
Although the opposition National Unity Government doesn’t hold any territory in Myanmar, it declared war on the ruling junta to support Suu Kyi.
After more than a decade of house arrest, Suu Kyi was elected to office in Myanmar in 2016. She was sentenced to two years imprisonment for fomenting dissent in opposition to military rule last week.
Tether claims it has the reserves to support all its $77bn worth of digital coins, but critics claim it has not provided proof.
Tether, the cryptocurrency company behind Tether, was ordered to pay $41m US authorities for statements it made that its currency was fully backed with dollar reserves. However, it has never admitted any wrongdoing.
The central banks are concerned that stablecoins have no transparency or regulation and could pose a threat to cryptocurrency markets. If one does collapse, it could cause massive losses for retail investors.
The Financial Stability Board is a global organization that was established to coordinate bank regulation after the financial crisis. It has demanded that the coins be formalized as banks, by backing them up with concrete assets.
Myanmar’s opposition has decided to adopt cryptocurrency as its official currency. This follows steps by El Salvador in September to make Bitcoin legal currency, despite concerns about digital coins being used to fuel dark web crime or avoid sanctions.
