On Friday, the Central Bank of Myanmar issued a public statement against the trade and use of bitcoin and other cryptocurrencies, warning people against investing in bitcoin and other cryptocurrencies due to volatility of their price. The announcement, published in local newspaper, came after a series of scams targeted at novice Burmese investors were unearthed.
U Than Lwin, former deputy governor of the Central Bank, told Irrawaddy that there are multiple reasons why people should not invest in cryptocurrencies. He said that the absence of consumer protection is one of the biggest reasons along with the price volatility and the fact that taking action in case of a crime is difficult. According to Lwin, as stated in the article;
The price is unstable all the time. Trading cryptocurrencies could result in losing everything you invested in them. It’s like gambling. Since it is a digital currency without physical form, there are many limits to imposing regulations on it. You won’t get help through legal action. People should be conscientious before investing in it.
The trade of cryptocurrencies, like that of bitcoin, Ethereum, Litecoin and local coins within Myanmar, was being done through different Facebook profiles and websites, which is a considerable risk. The trading of cryptos using Facebook in Myanmar is partly because the country has no legal framework for exchanges to register and work in Myanmar. Even though people are not allowed to trade bitcoin legally in Myanmar, a framework to block them from doing so is also absent. Thus, investors have found ways to manipulate the system.
Just last year, the Ministry of Home Affairs had issued a statement about the increasing number of cryptocurrency scams in the country. Scammers were targeting novice investors from villages and defrauded them of their investments. The scammers were mostly people operating outside of Myanmar, according to the statement by the Home Ministry. It was said in the report:
“Cryptocurrency companies that were based outside Myanmar have started working inside Myanmar. They have mostly focused on attracting investors in rural areas who have no experience or understanding about cryptocurrencies. These groups are inviting people to invest in cryptocurrency platforms using incentives. Digital currencies… are unstable and if anyone in Myanmar invests in them, it may affect the country’s economy. So, people should only study about cryptocurrencies”.
The Future of Cryptocurrency in Myanmar
The Finance Ministry and the Central Bank have no framework for the regulation of Bitcoin and companies are not allowed to register and trade cryptos in Myanmar. The country also has stringent banking laws which negatively affect people’s access to financial services. Right now, the country has no incentive for crypto companies to come and set up shop. However, seeing how countries like France have changed their perspective on cryptocurrencies, it is expected that Myanmar will soon embrace this technology.