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As crypto markets are tanking, traders get some welcomed good news – from an unlikely source. Myanmar’s shadow government made Tether its official currency.
The National Unity Government, which holds no real political power, stated that it accepts stablecoin Tether. Formed after former leader Aung San Suu Kyi’s ousting in February, the group stands in opposition to the military junta.
Former government officials that the Junta deposed and pro-democracy groups make up NUG. The shadow government holds no territory. However, they support local resistance groups that fight against the junta.
NUG Finance Minister stated that the group would accept Tether for domestic use. This way, they can make it easy and speed up the current trade, services and payment systems.
The move was in direct opposition to the Central Bank of Myanmar, which outlawed all digital currencies back in May. The central bank also threatened to imprison and fine anyone that violated the ban.
Interestingly, NUG raised $9.5 million from selling “Spring Revolution Special Treasury Bonds” to the Myanmar diaspora. The bonds sold off amid growing popular dissent against military rule.
Great News For Tether
Tether, or USDT, is a stablecoin that users can exchange for USD at a 1-to-1 ratio. Stablecoins like USDT help prevent the risks of holding volatile cryptos. Unlike Bitcoin, it does not have wild swings in prices. Instead, it always remains stable against the dollar.
This is why stablecoins are popular internationally. They allow everyone to hold and even spend the digital equivalent of US dollars. The equivalent dollar asset is also accessible on the blockchain.
The adoption is good news for Tether, as the company behind it faces another lawsuit. However, USDT is not the only stablecoin out there. Coinbase has its own USDC, and Binance has its BUSD. But at a market cap of $69 billion, USDT is by far the largest stablecoin out there. It is also the designated stablecoin of Bitfinex, the crypto exchange affiliated with Tether.
Stablecoins Boost USD?
It discussed Stablecoins in a recent House hearing on crypto regulation. Specifically, the conversation mostly centred on the impact of stablecoins on the dollar. Most members of Congress expressed concern over the potential that stablecoins could undermine the dollar. In particular, to undermine its status as a global reserve currency.
However, industry experts, as well as some congressmen, expressed the opposite view. Representative Ritchie Torres stated that the growth of USD stablecoins could boost the dollar’s global status. He called the rise of USD stablecoins a “vote of confidence” for USD.
What I find striking is that the leading stablecoin issuers have chosen to peg their stablecoins to the dollar, which strikes me as a vote of confidence that reinforces, rather than challenges, the status of the dollar as the world’s reserve currency.
Chad Cascarilla, CEO and co-founder of Paxos, agreed with this view. He underlined how USD stablecoins could boost access to dollars throughout the world.
Crypto is a tool for a lot of different things, but what people want for their everyday spending is dollars. If you’re in Argentina, you want dollars. If you’re someone anywhere in the world, you want to have access to dollars. Yet, that’s the hardest thing to have access to. That’s why tokenized dollars are so valuable. You don’t even need a bank account, yet you can have access to the system
Thanks to blockchain tech, stablecoins allow people to hold dollar equivalents throughout the world. Recent news in Myanmar also shows that they could help pro-democracy groups worldwide.