The National Unity Government has designated Tether as an official currency, violating last year’s cryptocurrency prohibition.
Myanmar, a troubled Southeast Asian nation, has a turbulent political past. Now, Bitcoin is influencing how the country’s political future is shaped. Myanmar’s National Unity Government, backed by supporters of jailed former leader Aung San Suu Kyi, has accepted Tether as the country’s official currency.
According to a report, NUG finance minister Tin Tun Naing said on Sunday that the NUG would accept Tether for “domestic usage” in order to “simplify and accelerate the present commerce, services, and payment processes.”
Tether is a stablecoin with a dollar-pegged value. This implies that the price of Tether is less volatile than the prices of more volatile cryptocurrencies like as Bitcoin or Ethereum, and that each Tether can be traded for a dollar, making it more ideal for payment purposes. However, there is debate about whether Tether is entirely backed by reserves.
While Tether has frequently said that its currencies are entirely backed by cash and its equivalents, the business settled with the New York State Attorney General earlier this year for US$18.5 million without admitting wrongdoing. Tether is prohibited from doing business in New York state as part of the settlement.
Related; Myanmar’s Shadow Government Establishes USDT As An Official Currency
In October, a Bloomberg writer discovered that Tether — whose reserves include commercial paper — had been lending to huge Chinese enterprises and other cryptocurrency businesses, putting the company at danger of a bank run if the investments failed. The same month, the US Commodity Futures Trading Commission levied a US$41 million penalties on Tether for making false statements regarding its reserves.
It is critical to remember that the NUG is a shadow government that has no territorial control or positions of power in Myanmar. As a result, NUG’s acceptance of Tether does not imply Myanmar’s acceptance of Tether as legal money.
To comprehend how it works, one must first grasp the country’s political past. Myanmar, previously known as Burma, was governed by the military for over 50 years, from 1962 to 2011. Myanmar’s military government was abruptly abolished in 2011 and a transitional civilian parliament was established.
Suu Kyi, the daughter of independence hero General Aung San, became the country’s de facto leader after the country’s first multi-party election in decades in 2015. However, the military retained tremendous authority in a variety of fields.
Myanmar had its second election in 2020, with Suu Kyi’s National League for Democracy winning by a landslide. The military, which supported the opposition, accused the election commission of fraud, but the panel denied the allegations. As a result, the Tatmadaw, Myanmar’s military, launched a coup, seized power, and established a one-year period of emergency.
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