A parallel government led by the supporters of Myanmar’s ousted leader Aung San Suu Kyi recognised Tether as an official currency for local use after the group began fundraising for a campaign that seeks to topple the military regime.
The National Unity Government officially accepts Tether, a cryptocurrency meant to be a dollar proxy, for “domestic use to make it easy and speed up the current trade, services and payment systems,” NUG Finance Minister Tin Tun Naing said Sunday in a Facebook post. No other details were given.
The NUG is an alliance of leaders from the ousted civilian government and pro-democracy groups. While they don’t control territory or hold positions of power in Myanmar, the group has declared war against the junta in September that has led to an escalation of battles between the military regime and local resistance groups.
The shadow government’s cryptocurrency adoption underscores its defiance against the Central Bank of Myanmar, which decreed all digital currencies illegal in May last year and threatened imprisonment and fines to any violators. Unlike Bitcoin or Ethereum, where daily price swings are typical, each Tether is supposed to be backed by one dollar and is therefore known as a stablecoin.
This move comes as policy makers around the world are assessing the potential benefits of adopting or creating cryptocurrencies or stablecoins as a part of their financial system. El Salvador became a first-mover for this when it made Bitcoin legal tender alongside the dollar from Sept. 7, the biggest test so far of its usefulness as a medium of exchange.
The NUG is not only looking at cryptocurrencies. The group raised US$9.5 million in the first 24 hours from a sale of what has been marketed as the “Spring Revolution Special Treasury Bonds” to the Myanmar diaspora globally to help topple the current government headed by coup leader Min Aung Hlaing. The bond appears to be structured like a direct lending instrument.
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The sales were stopped for a week until Dec. 6 due to high demand and there has been little detail on how much has been raised so far. The NUG also plans to appoint representatives in different countries to help with the sales.
Last week, the NUG said these so-called bonds would soon be sold within Myanmar, tapping growing anger against the regime just as a local court found Suu Kyi guilty of inciting dissent against the military. She was sentenced to jail for four years, although it was cut to two years at the current undisclosed location where she is being held.
The NUG aims to raise US$1 billion from the sale of the bonds, which the junta says violates counterterrorism laws.
The group seems to be focusing on cryptocurrencies such as Tether which can be traded peer-to-peer venues that allow users more privacy. However, the stablecoin has been at the center of speculation for years that it wasn’t really backed one-to-one with dollars as claimed.