An unusual plan by the exiled NUG government in Myanmar is making headlines today.
Prashant Jha at Coindesk reports the government has chosen Tether (USDT) as a legal currency.
As Jha points out, this undercuts a ban on cryptocurrencies by the ruling military government in Myanmar and its central bank.
“Per a report published in Bloomberg, the NUG will accept Tether for its ongoing fundraising campaign seeking to topple the current military regime in Myanmar,” Jha writes. “The shadow government also raised $9.5 million through the sale of “Spring Revolution Special Treasury Bonds” offered to the Myanmar diaspora across the world. The group aims to raise $1 billion through the sale of NUG-issued bonds.”
The move to innovate with a dollar-pegged stablecoin comes at a time when tensions are high in Myanmar after a 2020 coup, and the installation of a new government under military chief Min Aung Hlaing.
Those familiar with Myanmar know the problems have been going on for a long time, but the fallout of last year’s election has led to specific political problems.
As for the choice of Tether, it’s also interesting partly because US regulators are setting their sights on stablecoins.
It wasn’t too long ago that new SEC chair Gary Gensler was talking about how stablecoins might have to be regulated as securities.
And that controversy has, in some ways, not faded.
“Proponents consider Tether a risk to the cryptocurrency ecosystem, and regulators have criticized the stablecoin citing that its collapse could trigger a massive financial crisis,” writes Ekta Mourya at FXStreet. “Tether’s market capitalization is $77.2 billion, and its the fourth-largest cryptocurrency by market capitalization. Myanmar’s ousted government leaders chose Tether as it can easily be exchanged on peer-to-peer venues, it offers higher privacy to users. Though it is the center of speculation, it is considered the gateway to cryptocurrency for new traders and investors.”
All of that could place a downward pressure on Tether, which has survived scandals like the Bitfinex problem, where regulators accused the exchange of losing billions of dollars related to funding Tether.
Will the stablecoin adoption make a difference? Stay tuned.