Crypto Regulations in Myanmar
Myanmar has not currently enacted regulations or legislation specifically regulating cryptocurrency yet. Cointobuy’s analysis tool has ranked Myanmar in position 244 out of 249 countries in terms of cryptocurrency safety, also the crypto-related action in this country has a 0.7/10 safety rank.
Source: Freeman Law
Let’s see how well-known a cryptocurrency is and how about the legal restriction on 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.
Source: Inya Economics
All forms of cryptocurrency were banned in Myanmar long before the coup. In 2020, the Central Bank of Myanmar (CBM) declared a ban on cryptocurrencies referring to Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), and Perfect Money (PM), and all traders would be punishable by the monetary laws. Again, in January 2022, as a response to the NUG government’s declaration of Tether as official currency in December 2021, the SAC drafted a cybersecurity law that criminalized using VPNs and cryptocurrency
Source: Global Voices
In 2020, the Central Bank of Myanmar (CBM) announced that it does not recognize cryptocurrencies as an official currency, and anyone caught trading digital assets can be imprisoned or fined. In addition, the country’s central bank issued an announcement stating that financial institutions are not allowed to accept or facilitate transactions using digital currencies. [1] However, there’s no official law in the country that forbids the use and trade of cryptocurrencies. The CBM has not prohibited the use of under the law, it has just issued an announcement.
Source: Freeman Law
In 2020, the Central Bank of Myanmar (CBM) announced that it does not recognize cryptocurrencies as an official currency, and anyone caught trading digital assets can be imprisoned or fined. In addition, the country’s central bank issued an announcement stating that financial institutions are not allowed to accept or facilitate transactions using digital currencies. [1] However, there’s no official law in the country that forbids the use and trade of cryptocurrencies. The CBM has not prohibited the use of under the law, it has just issued an announcement.
Myanmar has not currently enacted regulations or legislation specifically regulating cryptocurrency yet. Cointobuy’s analysis tool has ranked Myanmar in position 244 out of 249 countries in terms of cryptocurrency safety, also the crypto-related action in this country has a 0.7/10 safety rank.
Source: Freeman Law
Myanmar’s Central Bank banned digital currencies of all forms on May 15th, 2020, long before the coup. The ban includes, but is not limited to, Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), and Perfect Money (PM) and traders will be prosecuted under extant monetary laws.
Whether there is actual legal power behind such threats or actual arrests made is still up for debate but, what is for sure now is, that the junta has been tracking down those who trade large volumes of money.
“What they are mainly afraid of is the funds getting to the NUG (National Unity Government – parallel/shadow government). Despite all their killings, violence, and threats, the funds continue to flow to the revolutionaries through a myriad of channels, of which some are cryptocurrencies,” said H, a trader who previously made a living importing goods from China.
Source: Thai PBS World
The irony of the military’s move is that, right after the ban on cryptocurrency, in February 2022, they declared that they are developing a digital currency.
Maj General Zaw Min Tun, who is the spokesperson of the military’s SAC, said that “A digital currency will help improve financial activities in Myanmar.” The SAC is struggling to resurrect the badly shrunken economy with the help of digital currency. Central banks of various countries are pursuing the dream of Central Bank Digital Currency (CBDC) such as China’s Digital Yuan project, to lift up economies stricken by the pandemic. Nevertheless, the World Bank’s senior economist for Myanmar, Kim Edwards, said, “We think the country is not in the best position to be able to pursue something like this,” at a conference.
Source: Global Voices
The Central Bank of Myanmar has received reports of several scams targeting consumers who lack an understanding of crypto.
According to the report, the central bank has stressed that the use of crypto is unauthorized in Myanmar — however, the country does not have any mechanisms or legal frameworks in place to regulate or block their use.
U Than Lwin, a former deputy governor at the central bank, told The Irrawaddy that price volatility, the lack of consumer protection, and the difficulty of taking legal action were three reasons “why investing in cryptocurrencies should be avoided.” He added:
“The price is unstable all the time. Trading cryptocurrencies could result in losing everything you invested in them. It’s like gambling.”
Source: Cointelegraph
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Myanmar has seen the benefits of the last mover advantage in the e-commerce and payments spaces in recent years. While the appetite exists for Myanmar to emerge as South East Asia’s innovation leader; issues such as legacy rules and fragmented regulatory structures hinder it.
One solution discussed is the adoption of a Fintech Regulatory Sandbox to give atmosphere to innovative start-ups threading the legal limit.
In Myanmar, a regulatory Sandbox would allow a payments company to experiment with cross-border remittance services while exempt from prosecution under section 42 of Foreign Exchange Management Law[2012]
Global hubs have benefited greatly from this model. One success story is South Korea’s Financial Services Commission(FSC), which has operated has regulatory sandbox since April 2019. The FSC sandbox attracted some $111million in investments for start-ups and expanded the country’s blockchain technologies and fintech market.
By adopting such a model, Myanmar could increase its tax revenue from applications generated in the regulatory sandbox, and eventually from the corporate tax paid by successful businesses that graduate from the sandbox
The regulatory sandbox could boost the confidence of domestic tech start-ups and foreign investors in doing business in Myanmar.
Source: Nelito
