Myanmar’s shadow National Unity Government said Thursday that it is ready to launch an online bank that uses cryptocurrency in an effort to disrupt the flow of foreign currency to banks run by the ruling military junta, including the country’s central bank.
The Spring Development Bank will be the Southeast Asian nation’s first financial institution to operate solely with crypto and blockchain technology. It will have a trial run with 1,000 users and 100 supervisors on July 22.
“Spring Revolution” refers to popular protests that began in February 2021 following the military’s coup d’etat.
The NUG – made up of members of Myanmar’s former democratically elected government and other opponents of the junta – set up the bank to ensure the financial security of the people, said Tin Tun Naing, the shadow minister of planning, finance, and investment and governor of the NUG's interim central bank.
Banks controlled by the junta have blocked the accounts of users, seized their deposits, and provided their personal account data to the authorities by violating the bank regulations, he said.
“There are many incidents where the terrorist military council has threatened people’s deposits in the banks which the people have deposited with trust,” he said at a press conference on Thursday. “We are responsible for protecting people’s financial security — the safety of the people’s funds and their personal data.”
Myanmar’s banking industry nearly collapsed following the military coup, as many bankers and other employees at financial institutions walked off the job to join the nationwide civil disobedience movement in opposition to the junta. The system received a further blow from restrictions on transactions implemented by the junta-controlled central bank.
The NUG issued an ordinance on June 1 to establish an interim central bank to regulate and rectify the banking sector and to safeguard foreign exchange reserves from misuse by the junta.
The Spring Development Bank, expected to be fully operational by the end of August, will serve as the NUG’s representative bank to help with funding, tax collection and fundraising for the Spring Revolution, Tin Tun Naing said.
Currencies supported
Initially, the bank will support transactions in Myanmar kyat, U.S. dollars, Malaysian ringgit and Singaporean dollars, said officials at the press conference.
Later, the bank will handle transactions in British pounds, euros, South Korean won, Japanese yen and other currencies.
The NUG is planning for the bank to support payments for trade and links with international banks, provide loans, and offer currency swaps, fixed deposits and prize-linked savings account services such as depositing gold and using credit cards, NUG officials said.
It also will issue revolutionary bonds and auction property owned by the State Administration Council, as the junta regime is known.
The bank expects to have 100,000 users in its first six months of regular operations, and 500,000 users in the following six months, officials said.
RFA could not reach the junta’s central bank for comment.
A financial expert said the development was positive but that SDB would have to take precautions to avoid fraudulent digital currency transactions.
“I see it as a positive since it is using transparent technology for transactions, but we have to be cautious about technical fraud — scams,” he said.
Easier for transferring money
Min Zayar Oo, the NUG’s deputy minister of planning, finance and investment, said the crypto banking system will be safe to use.
“Similarly, the SDB has also implemented a security system [in case] users leak the data,” he said.
Pro-military junta Telegram channels frequently reported arrests of supporters of the revolution and users of the NUG’s mobile money service, NUG Pay.
Myo Myint Aung, who is helping anti-dictatorship activists on the Thai-Myanmar border, said the crypto banking system will be easier for transferring money and supporting resistance fighters.
“For us, this means that when we send money to the youths [revolutionaries], we can send it safely,” he said. “In the same way, we deposit money in the bank safely. We don’t have to worry about our accounts being blocked.”
Translated by Htin Aung Kyaw for RFA Burmese. Edited by Roseanne Gerin and Malcolm Foster.