Cryptocurrency &

Its Future in Myanmar

August 3, 2021

Written by - Pann Myat Phyu Tint

Su Nandar Aung
Ye Zaw Khant
Source: Canva Source: Statista Global Consumer Survey

What is Cryptocurrency?

Cryptocurrency is a kind of digital currency that is predicated on blockchain technology.

There are more than 4,000 types of cryptocurrencies: Bitcoin, Ethereum, Tether, Binance
Coin, Cardano, Dogecoin and among them, Bitcoin is currently the most valuable coin in
the market.

Bitcoin was the first cryptocurrency that originated in 2009. The technology called
blockchain is utilized to calculate and engender the digital currency called Bitcoin. People
use cryptocurrency to buy stocks online and for investments in stock markets, to purchase
other services and products.

Regulations on Cryptocurrency around the World

Cryptocurrencies are legalized in European Union, G7, East & Central Africa, Southern
Africa, North America, Central America, Caribbean, Central Asia, East Asia, Central
Europe and Northern Europe countries. Nevertheless, cryptocurrency is recognized as
illegal in Northern Africa, Western Africa, Bolivia and Nepal. Currently, the most widely
used countries are Nigeria, Vietnam, the Philippines, Turkey, Peru, Switzerland, India,
China, the US, Germany and Japan.

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 Source: CLSA Asia-Pacific Markets, BSP, Business Processing Association of the Philippines (BPAP)

Use of Cryptocurrency in ASEAN Countries

In ASEAN countries, cryptocurrencies are legalized in Malaysia, the Philippines,

Singapore and Thailand. In the rest of ASEAN countries, although it is recognized as legal
to trade and hold, it is also illegal to use it as a payment tool and ban in banking.

Among ASEAN countries, the Philippines is one of the largest users of cryptocurrency.
The Philippines is the third-largest user of cryptocurrency in the whole world, not only in
ASEAN. The central bank of the Philippines, Bangko Sentral ng Pilipinas (BSP) has also
legalized the use of cryptocurrency. The Philippines is one of the earliest countries in
south-east Asia to use cryptocurrency as Filipino migrant workers from abroad use the
largest source of remittance by using cryptocurrencies. The BSP provides a trustworthy
platform and the support for Philippines’s cryptocurrency sector so that the gaming
rewards, Bitcoin (BTC), Automated Teller Machine (ATM) networks and rural banking
integration becomes reliable indicators and the cryptocurrency sector in the Philippines is
growing more reliably in advance.

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The legality of the Cryptocurrency Currently in Myanmar

Let’s see how well-known a cryptocurrency is and how about the legal restriction with
cryptocurrency in Myanmar. At the moment, cryptocurrency, a digital currency, is still not
widely used by the people of Myanmar and also there is no legal permission to use it from
the Central Bank of Myanmar (CBM). The CBM has issued two warning statements
against the use of cryptocurrency.

In the first warning statement issued on May 3, 2019, the type of cryptocurrency that was
banned from being traded was not disclosed, but it has been issued as a warning. A year
later, on May 15, it issued a statement restricting cryptocurrency transactions and
prosecuting violators, but did not specify the exact type of penalties.

The Depending Factors on the Use of Cryptocurrency

If the Central Bank of the Republic of the Union of Myanmar legally allows the use of
cryptocurrency, let’s think about whether there will be more crypto users and investors in
Myanmar. It would not be wrong to say that Myanmar is still a small underdeveloped
country compared to other Southeast Asian countries.

In addition, Myanmar has a lower class than other countries and there are still many
education level differences among the people. Most of the population in Myanmar is low-
income people with lower levels of living standards who are rarely exposed to technology.
These lower-class people who barely make both ends meet may not be interested in
anything else. Raising living standards also indirectly depend on the proliferation of digital
currencies, such as crypto.

Cryptocurrency is based on blockchain, so it is important that users must have the ability to
easily learn and master the basics of digital literacy. It is clear that Myanmar lags behind
other countries in the use of all advanced technology. To give a clear example, it took more
than a decade for mobile phones to become popular in Myanmar and now it has become
almost non-existent in all walks of life. The same is true of the growing usage of
cryptocurrency in Myanmar.

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Source: National Unity Government of Myanmar Facebook Page

Good out of bad

One of the pros and cons is the current political instability in Myanmar. The reliability of
citizens upon the banks is declining as a result of the current military coup. In addition, on
July 2, 2021, the National Unity Government ( NUG) announced that people would be able
to donate money using cryptocurrencies such as Tether (USDT) and Binance (BUSD),
leading to a resurgence in the use of digital currencies. As more and more people become
interested in a decentralized cryptocurrency, it is gaining traction on social media. Social
media users are now no longer familiar with cryptocurrency and are beginning to study
with interest. These include the widespread usages and interest of cryptocurrency in
Myanmar in the future.

Far-Reaching Consequences of Using Cryptocurrencies

As described earlier in this article, since the majority of households in Myanmar are living
below the poverty line and they do not have easy access to proper tools and information
related to technology and finance, it is obvious that they have less knowledge about these
issues when it comes to comparing with people in the ASEAN region. Therefore, Myanmar
citizens, if cryptocurrencies were legalized, would be faced with a variety of impacts, both
advantageous and disadvantageous.

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Because of the fact that cryptocurrency is not something similar to fiat money backed and
run by the central banks, government and third-party organizations are less likely to control
and trace crypto transactions. Moreover, one can prevent his personal data and identities
from being hacked and stolen while processing financial payments using crypto coins.
However, people who engage with unlawful activities such as drug smuggling, human
trafficking, auditing irregularities and fraud may take advantage of these kinds of things to
commit large-scale tax evasion, corruption, diverting funds and laundering money.
Accordingly, the government needs to introduce specific and functional laws and policies
to charge and terminate illegal businesses misusing cryptocurrency.

On the other hand, if a person is to transfer money from one country to another, he will
benefit from processing transactions with cryptocurrency because of a comparably less
amount of transaction fee and shorter duration period. Despite these reasons, he is likely to
be faced with some financial loss due to price fluctuations in crypto coins like BTC, ETH
and USDT. Likewise, profit can be generated by predicting frequent price alternations.

Conclusion

In light of what has been said above, Myanmar is still a poor and underdeveloped country
compared to its neighbouring countries. To legalize cryptocurrency on the surface, it may
seem simple, but from an economic point of view, it literally has many complex
implications. In order to expand the use of cryptocurrency in Myanmar, the government
needs to have a strong legal and technical infrastructure to protect its users. And also the
users need to have sufficient and financial literacy knowledge as well as basic knowledge
that is important to live in harmony with modern society. The people of Myanmar, who
have been suffering from double crisis for over a year, are now struggling to cope with the
current political instability. The immediate recovery from these issues, such as a coup, will
definitely have a prominent impact on the future of cryptocurrency in Myanmar.

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