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Article by Nishant Choudhary and Rohan Bishayee on Cryptocurrencies in Myanmar Banking in Legalico Publication

Nishant Choudhary (Deputy Managing Director, Myanmar Head of Banking and Finance Group) and Rohan Bishayee (Legal Advisor) contributed an article on the subject of cryptocurrencies in Myanmar: “Cryptocurrencies: a Risky Affair with No Immediate Potential Going Forward” that was recently featured in Legalico’s publication:

Legalico is an online platform providing a multi-jurisdictional overview of relevant laws, regulations, and recent developments in the realm of Fintech.

Our DFDL Myanmar team outlines the current state of the cryptocurrency market in Myanmar and what the future holds for this exciting area and the possibilities of growth in the coming years.

Please find the full article below:



The fintech boom is real and its rippling effects are reaching most parts of the ASEAN region with comprehensive legal and regulatory changes being ushered in to accommodate this exciting and rapidly developing sector. Blockchain technology, one of the latest facets of the fintech industry has also undergone rapid expansion with cryptocurrencies such as BitCoin, Ethereum and Ripple cornering a large share of the market. However, Myanmar does not currently have a legal framework that recognizes cryptocurrency at the present time. The Central Bank of Myanmar (“CBM”) has been a frontrunner in issuing statements warning the public of the risks of cryptocurrency and has recently issued a notification stating that it does not recognize cryptocurrency as legal tender.


The Foreign Exchange Management Law 2012 and the Financial Institutions Law 2016 which otherwise capture and define all forms of legal tender (including e-money) neglects to provide a suitable definition of cryptocurrency.
The position of cryptocurrency (since its inception and boom in ASEAN) was therefore vague and uncertain with the CBM issuing no official directive/notification in relation to the usage/recognition of cryptocurrency. However, recently in May 2019, the CBM finally officially explained that it does not recognize cryptocurrency as legal tender.
By way of this announcement, the CBM stated that all transactions involving cryptocurrencies such as Bitcoin, Litecoin, Ethereum, Perfect Money (and those of a similar nature) would not be recognized as acceptable/permissible transactions from a Myanmar law perspective.
The CBM further explained that any person who transacts in cryptocurrency would be breaching relevant regulations from the CBM, however, no penalties have been stipulated by the CBM for dealing in cryptocurrency. The CBM, as always, has also stated the general transaction risks associated with cryptocurrencies, being largely unregulated.


1. General Issues Surrounding Cryptocurrencies

Cryptocurrencies, generally have a wide entrance, but a very narrow exit route. With the unpredictable nature of the markets and associated market risks, exits can be barred due to technological constraints, the difficulty of converting it into ‘fiat’ currency, along with few counterparties with whom to trade. While there remains no correlated assets backing cryptocurrencies, dealing with cryptocurrencies in terms of risk aversion is minimal. The intangible and illiquid nature of cryptocurrencies (combined with the point above about narrow exits) hampers their security and insurability. The uninitiated and inexperienced investor can become easy prey to cyber-extortion, market manipulation, fraud and other risks. Human error (technical) and technological glitches also stand in the way. With the unregulated investments in cryptocurrency [without acute and effective Know Your Customer Checks (“KYC”)], money laundering becomes another very significant issue triggering questions on Anti-Money Laundering (which ASEAN nations are particularly worried about) and increased risks of terrorist financing and corruption.

2. Myanmar Specific Issues

Myanmar’s position in light of cryptocurrency has been finally cleared by the CBM in so far as it has deemed it as unrecognized currency. With societal (and educational) issues continuing to beset Myanmar where a significant mass of the population remain undereducated (especially in matters of technology), the proliferation of cryptocurrency may not be the most suitable option in Myanmar at the present time. Additionally, Myanmar continues to languish with an underdeveloped technological infrastructure and weak levels of internet penetration rendering it prone to cyber threats and other associated forms of fraud.


In light of the growing fintech industry and the need for Myanmar to have firm regulations in place to support and facilitate fintech (and cryptocurrencies), the CBM (with the assistance of the Myanmar government) should (on a phase by phase basis) begin to develop a viable and durable fintech framework. Adequate technical and internet measures should be implemented in order to have sufficient know-how and resources in place to facilitate the growth and trade in cryptocurrencies. Thereafter, the CBM should issue comprehensive regulations and guidelines on cryptocurrencies (though we believe it would take a considerable period of time owing to the societal conditions already mentioned). Public knowledge and awareness drives also need to be conducted on a large scale for effective facilitation and risk mitigation for dealers of cryptocurrency.

Potential Gains

These steps will reduce the considerable legal hurdles surrounding the fintech sector (especially cryptocurrencies) and make cryptocurrencies a normalized, regulated, and potentially lucrative element of the Myanmar economy. This would enhance the prospects of Myanmar’s integration with international best practices and heighten its appeal to foreign participants who may still have reservations about this investment destination just relatively recently opened to the world.

DFDL Contacts

Nishant Choudhary

Deputy Managing Director,

Head of Banking & Finance Practice

DFDL Myanmar

Rohan Bishayee

Legal Adviser

DFDL Myanmar