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The World Bank believes the country is not in the best position to pursue such a move because it would require a perfect regulatory structure and high capacity within the administration to succeed, both of which the country currently lacks.
As the Military government in Myanmar begins to face the reality of the level and depth of damage in its economic sector, it has finally come to terms with the level of decay in the financial industry in the past few months. Now there are talks that Myanmar would have its own digital currency.
To understand the number behind that captures this rot, a recent World Bank report comes in handy. According to the international body report, the country’s economy shrank by roughly 18% in the fiscal year ending in September 2021.
To further buttress the rot in the sector, the World Bank predicted that the economy would record a growth rate of just 1% from that position by the end of the current fiscal year set to run till September this year.
The report which was released last week also indicated that this growth rate is a far cry from the around 30% growth rate the country’s economy should have benefitted from last year alone but couldn’t, thanks to the massive blows dealt by the pandemic and military coup that crippled it.
Myanmar Eyes National Digital Currency
However, as the country’s military government began to come to terms with this reality, details have emerged that in a bid to boost its economy, the country would launch its digital currency.
This development was revealed by the country’s deputy information minister, Maj Gen Zaw Min Tun.
According to him, the government plans to establish a digital currency to support domestic payments and boost the economy within the year and is assessing how to move forward,
“We are undecided whether we should do it as a joint venture with local companies or by the government alone,” said Zaw Min Tun, who is a top spokesman of the State Administration Council. He explained further that digital currency would help improve financial activities in Myanmar.
Interestingly, the decision of the Myanmar military government to adopt a digital currency comes barely two months after what can best be described as a shadow government, a group led by supporters of ousted leader Aung San Suu Kyi recognized Tether as an “official currency”.
The adoption of Tether by the group was driven by the need to use it in their fund-raising campaign effort aimed at toppling the military regime.
Speaking on the new development, World Bank senior economist for Myanmar, Kim Edwards, opined that the move is bereft of proper planning.
Edwards noted that the World Bank believes the country is not in the best position to pursue such a move because it would require a perfect regulatory structure and high capacity within the administration to succeed, both of which the country currently lacks.