Myanmar could become the latest country to have its own sovereign digital currency, following in the steps of Nigeria and the Bahamas. The country’s military government said recently that it’s considering launching a digital currency to boost its economy, but the World Bank has shot the idea down, saying the country isn’t prepared enough.
Myanmar’s current government has been in power since February 1, 2021, when the military, known locally as the Tatmadaw, deposed the elected members of the then-ruling party and took over. In the year since then, the country has grappled with a spiraling economy that was hit hard by the pandemic and worsened by the coup d’état.
According to one government spokesman, the answer to reviving the economy may lie in a digital currency. Major General Zaw Min Tun, the spokesman of the State Administration Council, says that this would boost the economy by enhancing domestic payments.
“A digital currency will help improve financial activities in Myanmar,” he stated, as reported by Bloomberg.
However, the government has yet to decide whether it should go about the initiative alone or if it should involve third parties.
“We are undecided whether we should do it as a joint venture with local companies or by the government alone,” the official added.
In the fiscal year ending in September 2021, Myanmar recorded some of the biggest blows to its economy. The coup earlier in the year, coupled with the pandemic and a slowdown in global trade combined to shrink the economy by 18%. The World Bank estimates that the economy will only recover marginally, predicting a mere 1% growth rate this year.
However, the World Bank is not a big fan of the idea of digital currency in Myanmar. Kim Edwards, the bank’s senior economist for the country commented, “We think the country is not in the best position to be able to pursue something like this. It would need a very good regulatory structure and high capacity within the administration to make it happen.”
The latest news comes just weeks since a parallel government in Myanmar, led by supporters of the ousted leader Aung San Suu Kyi announced that they now recognize Tether as an official currency for local use. This is despite a directive by the Central Bank of Myanmar banning all digital currencies in May 2020.
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