On May 24, 2024, the Central Bank of Myanmar (“CBM”) issued a public notice warning individuals against participating in the sale, purchase, exchange, or transfer of unregulated digital currencies, as well as unauthorized money transfers. The CBM has indicated its readiness to enforce regulations by closing bank accounts and pursuing legal action, which may result in imprisonment, fines, or both, in accordance with the Central Bank of Myanmar Law, the Anti-Money Laundering Law and the Financial Institutions Law.
The CBM is the sole legal entity authorized to issue currency in Myanmar, as stipulated in the Central Bank of Myanmar Law. The CBM does not recognize digital currencies as official currency, nor has it granted permission to financial institutions within Myanmar to trade them. The existing legal framework, comprising the Foreign Exchange Management Law and the Financial Institutions Law, further cements the illegality of cryptocurrency transactions within the nation’s borders.
Four years ago, in May 2020, the CBM issued Notification No. 9/2020, prohibiting all persons residing in Myanmar from engaging in the sale, purchase, or exchange of unregulated digital currencies. The list of prohibited currencies includes widely recognized cryptocurrencies such as Bitcoin (BTC), Litecoin (LTD), Ethereum (ETH), and Perfect Money (PM), with a particular emphasis on transactions conducted through personal Facebook accounts and web pages.
Before the issuance of the 2020 notification, the CBM had announced that anyone engaging in digital currency transactions did so at their own risk, but no enforcement measures were being taken at the time. However, after the 2020 notification was issued, the CBM has pursued legal action against persons involved in illegal currency conversion and unauthorized hundi money transfers using Tether (USDT). These enforcement measures have included shutting down bank accounts and initiating legal proceedings under the Anti-Money Laundering Law and the Financial Institutions Law.
In light of these developments, while overseas cryptocurrency operators have yet to face legal action, persons engaged in cryptocurrency transactions should be aware of the possible legal repercussions in Myanmar.
For further information, please contact:
Yuwadee Thean-Ngarm, Partner, Tilleke & Gibbins
yuwadee.t@tilleke.com
