In Myanmar, a government led by those faithful to Aung San Suu Kyi—the former state counselor of Myanmar (the de facto title for the head of government)—has recognized as an official currency, per Bloomberg.
The National Unity Government (NUG)—as the entity is called—reportedly made its announcement today. Tether will be for “domestic use to make it easy and speed up the current trade, services and payment systems,” the NUG’s finance minister Tin Tun Naing reportedly said.
The National Unity Government lost power in Myanmar in February of this year when the military declared a one-year state emergency.
At the time, First Vice President Myint Swe became the Acting President of Myanmar, who in turn handed power to the Commander in Chief of Myanmar’s Defence Services, Min Aung Hlaing. Since then, the NUG has lost all power in government and fails to control any territory in the country.
In September, the NUG declared war on the military government, causing escalations of violence across the country.
Tether as political opposition
The NUG’s Tether embrace can be seen as the latest in the government’s attempts to reject the political authority claimed by Myanmar’s military.
In May last year, the Central Bank of Myanmar issued a decree which said all digital currencies—like Tether—were illegal. Now, NUG is turning the crypto industry’s largest stablecoin into official currency in order to fund its operations.
Yet, the NUG’s pivot to the crypto industry’s most well-known stablecoin does not come without its risks. For months, Tether has routinely been criticized for a lack of transparency when it comes to disclosing how the stablecoin is backed by the dollar.
Tether (the company) long claimed that its stablecoin could be redeemed for U.S. dollars. In May, however, Tether released a breakdown of its reserves, which revealed that less than 3% of Tethers were backed by cash.
In October, the Commodity Futures Trading Commission hit Tether with a $41 million fine for allegedly making “untrue” statements about its fiat-backed reserves.
This is not the first time a country has pivoted to cryptocurrency as an option for legitimate currency.