Myanmar’s central bank wary of fast growing cryptocurrency use in the country

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Myanmar's Central Bank Wary Of Fast Growing Cryptocurrency Use In The Country

The Central Bank of Myanmar is determined to curb the growing local cryptocurrency industry after it issued a warning against engaging in cryptocurrency activities in May.

According to a report in the Myanmar Times, the central bank said that it does not officially recognise digital money as legal currencies and warned financial institutions, banks and exchanges against conducting transactions involving digital assets as they are not supposed to accept or facilitate transactions involving digital currencies.

Myanmar investors have been increasing their stakes in Bitcoin and similar cryptocurrencies lately. Local advertising for Bitcoin exchanges on social media is at its peak, which is prompting more people to participate in trading. The central bank fears that the process might shift considerable capital from Myanmar’s financial markets to an industry that is not theirs, which is why it is discouraging people from investing in or using Bitcoin and similar cryptocurrencies.

However, as there is no official law, it cannot be said that trading in digital currencies is illegal at the current point of time. The central bank also does not have constitutional backing to announce an outright ban on cryptocurrencies. Lawmakers would first need to define cryptocurrencies legally before pursuing action against or in favour of them.

The central bank is now left with two options: either it can work towards legally restricting people from investing in Bitcoin like the Reserve Bank of India did, or it can take a proactive approach like Japan or Switzerland to make Myanmar open for Bitcoin-related developments and innovations.

Currently, just 17 countries, including the US, Singapore, Japan, Ukraine, the UK, Germany, Switzerland and Hong Kong, officially allow transactions in digital currencies. These countries have already enacted laws to protect users from fraud and money laundering. 

Myanmar has yet to reach that level though. Therefore, it is likely that Myanmar’s cryptocurrency sector will continue to grow in the shadows in the foreseeable future because there are no tangible rules to govern the industry.

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The Central Bank of Myanmar is determined to curb the growing local cryptocurrency industry after it issued a warning against engaging in cryptocurrency activities in May. According to a report in the Myanmar Times, the central bank said that it does not officially recognise digital money as legal currencies and warned financial institutions, banks and exchanges against conducting transactions involving digital assets as they are not supposed to accept or facilitate transactions involving digital currencies. Myanmar investors have been increasing their stakes in Bitcoin and similar cryptocurrencies lately. Local advertising for Bitcoin exchanges on social media is at its peak,...

Reading Time: 2 minutes

Myanmar's Central Bank Wary Of Fast Growing Cryptocurrency Use In The Country

The Central Bank of Myanmar is determined to curb the growing local cryptocurrency industry after it issued a warning against engaging in cryptocurrency activities in May.

According to a report in the Myanmar Times, the central bank said that it does not officially recognise digital money as legal currencies and warned financial institutions, banks and exchanges against conducting transactions involving digital assets as they are not supposed to accept or facilitate transactions involving digital currencies.

Myanmar investors have been increasing their stakes in Bitcoin and similar cryptocurrencies lately. Local advertising for Bitcoin exchanges on social media is at its peak, which is prompting more people to participate in trading. The central bank fears that the process might shift considerable capital from Myanmar’s financial markets to an industry that is not theirs, which is why it is discouraging people from investing in or using Bitcoin and similar cryptocurrencies.

However, as there is no official law, it cannot be said that trading in digital currencies is illegal at the current point of time. The central bank also does not have constitutional backing to announce an outright ban on cryptocurrencies. Lawmakers would first need to define cryptocurrencies legally before pursuing action against or in favour of them.

The central bank is now left with two options: either it can work towards legally restricting people from investing in Bitcoin like the Reserve Bank of India did, or it can take a proactive approach like Japan or Switzerland to make Myanmar open for Bitcoin-related developments and innovations.

Currently, just 17 countries, including the US, Singapore, Japan, Ukraine, the UK, Germany, Switzerland and Hong Kong, officially allow transactions in digital currencies. These countries have already enacted laws to protect users from fraud and money laundering. 

Myanmar has yet to reach that level though. Therefore, it is likely that Myanmar’s cryptocurrency sector will continue to grow in the shadows in the foreseeable future because there are no tangible rules to govern the industry.

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