Myanmar’s shadow government uses Tether stablecoin USDT as official currency and Dollar proxy

  • The use of Tether’s USDT stablecoin will make it easier for the pro-democratic groups to raise funds and topple the present government.
  • It will serve as a Dollar Proxy for all domestic transactions in Myanmar.

The National Unity Government of Myanmar (NUG) has announced stablecoin Tether (USDT) as the official currency of the country. It said that it will serve as a dollar proxy for domestic transactions taking place in the country.

The NUG is kind of a parallel government comprising of pro-democracy groups. However, these pro-democracy groups were ousted from the administration following a military coup. Since then, they have been raising funds for their revolution to topple the military government. The adoption of Tether (USDT) will also make it easier for this group to raise funds.

Related: Research: These two firms dominate the entire Tether (USDT) flow

The idea of using the Dollar-pegged USDT actually helps them in using the American Dollar. Besides, it also helps them bypass the restrictions and censorship of the military-led government. NUG Finance Minister Tin Tun Naing said that Tether (USDT), a digital currency that also serves as a Dollar proxy.

Just like other public cryptocurrencies, Tether (USDT) can be used as a means of transferring value. Stablecoin Tether isn’t in control of any particular government but holds value similar to the U.S. Dollar. this makes it hard for governments and other authorities to prevent payments. As the Bloomberg report notes:

NUG’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.

NUG selling bonds to the global Myanmar diaspora

With the NUG shut off from access to government funds, it started selling bonds last month. But in May 2020, the current Myanmar regime also outlawed the use of digital assets. Thus, the adoption of Tether (USDT) seems to be a practical step from NUG, however, it also means a political provocation towards the new government.

NUG raised a total of $9.5 million within the first 24 hours by selling the “Spring Revolution Special Treasury Bonds” to the Myanmar diaspora across the world. NUG is expecting to raise total proceeds of $1 billion. The goal of NUG is to raise enough funds, overthrow the current government and thus regain power.

Cryptocurrencies have remained at the center of geopolitical events happening worldwide. Latin American country El Salvador made Bitcoin (BTC) a legal tender along with USD. Locals in other weak economies have also been buying cryptocurrencies to protect their wealth against the weakening Dollar.

Post-Myanmar’s military coup, the local banks ran short of cash. Also, the national currency, the kyat, fell by more than 60 percent. This is yet another example that digital currencies are proving to be useful for a pro-democratic agenda.

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Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fictions novels and sometimes explores his culinary skills.

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