| 2 October 2022, Sunday |

Myanmar junta to establish its own digital currency to boost economy

According to a top State Administration Council spokesperson, Myanmar’s military administration aims to develop a digital currency to assist domestic payments and stimulate the economy within the year and is reviewing how to proceed.

“We are unclear whether we should operate it as a joint venture with local enterprises or as a government-only company,” said Major General Zaw Min Tun, deputy communications minister in the junta that deposed the civilian administration a year ago. “A digital currency will aid in the improvement of financial activity in Myanmar.”

According to the World Bank, Myanmar’s GDP dropped by 18% in the fiscal year that ended in September 2021, and it is expected to increase by only 1% through September this year. According to a research released last week by the International Monetary Fund, Myanmar’s GDP might have grown by 30% if not for the epidemic and coup.

The suggestion by the State Administration Council comes only two months after a group led by supporters of deposed leader Aung San Suu Kyi designated Tether as a “official currency” for use in a fund-raising drive to destabilize the military administration. Suu Kyi is now incarcerated on a variety of accusations.

For years, central banks throughout the world have been striving to build digital currencies, with some intending to use them for retail transactions and others intending to use them only for interbank operations. China, which has one of the most sophisticated digital yuan projects, has been working on it since at least 2014.

“We believe the nation is not in the ideal position to pursue anything like this, Kim Edwards,” said the World Bank’s lead economist for Myanmar last week at a news conference. To make that possible, he continued, a very solid regulatory system and significant capacity inside the administration would be required.

“At this time, we are still learning about digital currencies and conducting conversations,” said Win Myint, director-general of the Central Bank of Myanmar’s currency-management department. We must weigh the benefits and drawbacks.”

Myanmar isn’t the only country considering cryptocurrency initiatives. The Venezuelan National Assembly approved a law last month to set conditions for digital-currency transactions. According to a Bloomberg index, inflation in bolivars, the local currency, has fallen to an annual rate of 53 percent in the last three months, down from far north of 1,000 percent in recent years.

  • alarabiya