Sometimes the political context of countries affects economic realities. Political conflicts in the world provide regular examples of this. This is the case today in Myanmar. The political rift has split the country in two. On one side, we find the military junta and its supporters. On the other, there are the government supporters ousted in 2021. The ruling military junta has announced plans to create a crypto. At the same time, the government also took the decision to launch its digital currency, exploiting the frozen national funds.
Cryptos Necessary for Revolutionary Efforts
The former executive of Myanmar does not intend to stand idly by in the face of the military junta, despite the fact that he has been removed from power. In a recent interview with Bloombergthe Minister of Planning in exile, Tin Tun Naing, said that with “the blessing of the United States “, the government team will “virtually use the country’s reserves frozen by the Federal Reserve Bank of New York since February 2021” in order to deploy a digital currency.
According to Bloomberg, the funds mentioned by Mr. Naing could be close to the billion dollar mark. They would have been frozen on accounts based in Singapore, Thailand and Japan. The Minister, however, acknowledged that there is little chance that the United States will consider the possibility to allocate funds directly to the government. Nevertheless, he pointed out that the money is needed to “support revolutionary efforts” in the country. Thus, the authorities will fund the revolution with cryptos.
The government is not alone in considering launching a crypto asset. In February 2022, a representative of the junta revealed that the military were also going issue a digital asset. This, with the aim of supporting payments within the country. In addition, according to him, the digital currency will serve to “improve financial activities” in the country.
As a reminder, shortly before the military took over Myanmar, the Central Bank warned that anyone using digital assets could either be jailed or fined.
Digital currencies could end up at the heart of the conflict between the military junta and Myanmar’s former government. The junta plans to launch its own digital currency to “support financial activities”. At the same time, the government has indicated its desire to develop a crypto asset as well. This, based on the funds that were previously frozen.
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