The National Unity Government (NUG), which overthrew Myanmar’s leader Aung San Suu Kyi earlier this year, has recognised Tether as the official currency for local use, in what could be an effort to raise funds for its campaign to remove the military regime in the country.
The NUG, which consists of political leaders who had been removed from the country’s civilian government and people from pro-democracy groups, had said earlier that it was in the process of raising capital to fund its efforts in the country.
To be clear, the NUG is a shadow government that doesn’t hold any official positions in Myanmar’s government. In a post on Facebook, Tin Tun, the Finance Minister in the NUG, noted that Tether is backed by the US Dollar and that using it for domestic purposes could allow for easier and faster trade, services and payments.
Why does the NUG want to use Tether?
Tether is a stablecoin that was developed by the crypto-exchange Bitfinex in 2014. Stablecoins are cryptocurrencies that don’t change price in the volatile manner that Bitcoin or Ethereum do. Instead, the price of Tether remains at $1. The coin is the fourth largest cryptocurrency in the world and has a market capitalization of over $76 billion, according to CoinMarketCap.
The adoption of Tether as official currency is a way for the NUG to defy the Central Bank of Myanmar (CBM), which regulates currency in the country. In May last year, the CBM had said that all cryptocurrencies were banned in the country.
In its announcement the CBM said that people trading Bitcoin, Litecoin and other cryptos through their personal Facebook accounts would be subject to regulation and that trading in cryptocurrencies could lead to prison or fines.
While the NUG’s move doesn’t make Tether an official currency in Myanmar, it comes at a time when other governments have made similar moves. Notably, El Salvador accepted Bitcoin as legal tender earlier this year, though Tether hasn’t been used in the same use case so far. Countries like the US, India and many others are also formulating laws to regulate trading of cryptocurrencies within their borders.
This is also not the first time that the NUG is raising funds for its war against the government. The group had held a 24 hour sale of the “Spring Revolution Special Treasury” bonds in February this year, saying it wanted to raise a billion dollars through them. It had raised over $6 million before pausing the sale due to “high demand”.
The article originally published on Business Insider.