Myanmar’s shadow government has acknowledged stablecoin Tether (USDT) as an official currency as it continues efforts to regain control from the military junta, reports Bloomberg.
Tin Tun Naing, the National Unity Government’s (NUG) finance minister, announced the adoption of the controversial dollar-pegged cryptocurrency in a Facebook post on Sunday.
The post claimed the pro-democracy group’s endorsement of Tether would “make it easy and speed up the current trade, services, and payment systems,” (translation via Bloomberg).
In May 2020, Myanmar’s central bank said it does not recognize crypto as official currency. It effectively banned financial institutions in the country from dealing with digital assets.
But the NUG is unable to access official government funds. Its Tether nod is likely an attempt to encourage Myanmar citizens to operate outside of the reach of the controlling military junta, which seized power earlier this year.
Myanmar’s parallel government needs cash
The NUG operates as a government-in-exile, outside of official office. The group is made up of leaders from the Southeast Asian state’s last civilian government.
Myanmar had previously been under complete military control for decades. In 2015, Aung San Suu Kyi led the National League for Democracy party (NLD) to a historic victory.
NLD became the first administration not selected by the military and its political allies. The party lost power after a military coup in February this year.
Suu Kyi and a number of party members were detained by military forces on the day that the NLD’s second term in office was set to begin.
The NLD won a landslide victory in the previous November’s general election, securing 80% of the vote.
The coup followed accusations of voter fraud by the military-supported Union Solidarity and Development Party (USDP).
The military set its commander-in-chief as leader and declared a year-long state of emergency. A president was installed in August.
Throughout this, often violent conflict between citizens and the ruling military junta has resulted in more than 1,000 civilian deaths.
Military control remains despite the rising death toll and NUG’s recognition from the western world as the legitimate leading party.
Tether as an alternative to Myanmar’s kyat
Since the coup, the NUG has been on a billion-dollar fundraising campaign to finance its challenge for political power.
It reportedly raised $9.5 million in 24 hours from the sale of so-called ‘Spring Revolution Treasury Bonds’ last month. Running totals are unreported.
In its current political state, Myanmar continues to descend into financial chaos. NUG’s endorsement of Tether, while a novelty for crypto, could actually make matters worse for the in-power military government if adopted at scale.
In May, parallel finance minister Tun Naing warned foreign countries and banks against offering financial support to the military regime. He promised he would not honor any debt should the NUG regain power.
NUG has also encouraged citizens to withhold tax and boycott junta-linked businesses.
And with Myanmar’s local currency, the kyat, plummeting, Tether could be an attractive option for citizens wanting to reject the status quo.
However, as crypto researcher Bennett Tomlin pointed out, Tether actively freezes sanctioned addresses at the whim of the Feds and other global enforcement agents.
So, Myanmar’s shadow government adopting Tether as official currency leaves open the opportunity for their finances to be controlled by foreign interests, particularly the US.
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