Myanmar's Crypto Surge Defies 2021 Ban, USDT Transactions Rise 200%

In Myanmar, the political instability and the 2021 coup, along with the collapse of the kyat and capital controls, have driven citizens to explore digital assets as tools for remittance, savings, and financing resistance. However, the Central Bank of Myanmar (CBM) considers such activities illegal, with potential penalties including prison terms and financial fines. Financial institutions are prohibited from engaging with cryptocurrencies.

Historically, in May 2020, CBM Notification 9/2020 strictly prohibited the sale, purchase, and trade of cryptocurrencies like Bitcoin, Litecoin, Ethereum, and Perfect Money on social media or any other platforms. In December 2021, the opposition National Unity Government (NUG) declared Tether (USDT) as legal tender in regions under its control to circumvent junta currency controls. By May 2024, CBM reiterated that unregulated digital currency transactions are punishable, with potential bank account closures and accusations of violating AML and banking laws. Despite these threats, peer-to-peer transactions on Telegram and offshore exchanges have surged, with stablecoins, particularly USDT on Tron, dominating informal international payments.

The regulatory framework in Myanmar is stringent. CBM is the sole issuer of currency and defines crypto as an unregulated instrument, giving it the authority to freeze bank accounts and initiate criminal charges. Enforcement is backed by laws such as the Foreign Exchange Management Law, Financial Institutions Law, and AML laws. However, there are no licensing regulations, sandbox regulations, or tax circulars addressing virtual-asset activity issued by any ministry. Crypto-linked transfers are considered suspicious and can be investigated under the Anti-Money Laundering Law. Theoretically, profits from crypto transactions are subject to taxes as other income, but practical reporting is hindered by the lack of legal status.

Cryptocurrency policies in Myanmar are clear: digital currency is not legal tender and cannot be used for on-shore payments. While ownership and trading are not explicitly criminalized, trading itself is illegal. Mining is not directly prohibited, but persistent energy shortages and the threat of equipment confiscation keep it on a low, clandestine scale. No exchange, domestic or foreign, has CBM authorization, leading nationals to turn to informal OTC desks, hundi agents, or offshore platforms via VPN. The military government has no blockchain plans, but the Spring Development Bank of the NUG, implemented on Polygon, offers diaspora remittances, gold-backed savings, and USDT rails to finance resistance communities.

Grassroots developers in Myanmar are focusing on ultra-low-bandwidth solutions like USSD wallets, Telegram bots, and QR codes that function even during internet blackouts. These solutions allow vendors to receive payments in stablecoins and convert them to cash the same day. Diaspora agencies relay donations in Bitcoin or USDT to humanitarian field-based relief agencies. NGOs believe blockchain can be used for transparent relief-fund monitoring in areas with connectivity.

Challenges in Myanmar's crypto landscape include legal dangers, connectivity issues, volatility and fraud, currency defense concerns, and sanctions pressure. Banking, forex, and AML laws put users at risk of arrest, discouraging mainstream adoption. Frequent internet outages and low smartphone adoption by rural users limit access to wallets. There is no consumer protection, leading to rampant pump-and-dump tokens and imitation exchange pages on Facebook. Authorities worry that stablecoins will further undermine confidence in the kyat and deplete foreign reserves. Western pressure limits large exchanges from working directly with Myanmar, directing them to shadowy solutions.

Critical regulatory trends and opportunities include stricter enforcement by CBM, which is drawing new AML guidelines to target mobile-money operators and identify crypto-linked transfers exceeding USD 1,000 equivalents. Suspected accounts will be closed faster after May 2024. The official adoption of USDT by NUG has encouraged merchants in opposition strongholds to price in stablecoins, a practice expected to increase with continued fragmentation. Myanmar tech communities are monitoring the sandbox regime of neighboring countries and the FinTech decree of Vietnam as potential post-conflict digital-asset regimes. International NGOs are urging the issuance of limited-purpose licenses to transfer aid funding on-chain, citing the transparency of blockchains to cover donor-audit obligations without requiring money to be transferred via junta-controlled banks.

In conclusion, Myanmar faces a regulatory dichotomy: an official blanket ban on cryptocurrency trading by the military-led CBM and an expanding underground scene using stablecoins for survival, remittances, and protest. Future governments will decide whether harmonized regulation or extended prohibition of digital assets will transform them into a driver of financial inclusion or continue to provide an underground lifeline to the fringe of the nation.