In a bold move that could reshape the financial landscape of Myanmar, the National Unity Government, the country's shadow government, has backed the launch of the Spring Development Bank, the nation's first crypto-based bank.
Named after the Spring Revolution, the opposition movement against the ruling military junta, the bank aims to bring "freedom and democracy to the 55 million citizens of Myanmar."
Constructed on the Polygon Network, the bank aims to make both domestic and international payments faster and more efficient. It also plans to offer international access to a broad array of financial products, including fixed deposits, currency exchange services, cross-country remittances, and digital gold savings, bank representatives said at a press conference on Thursday.
The bank's target demographic isn't just the 55 million Burmese living in Myanmar, but also the two-million-strong Burmese diaspora who live and work outside of Myanmar and frequently send money back to the country. The bank aims to reduce the high fees currently levied on sending money back to the country, which can reportedly reach as high as 30%.
The Spring Development Bank is licensed and regulated by the Interim Central Bank of Myanmar, controlled by the National Unity Government (NUG). The bank's CEO, U Calvin, stated that the launch of the new institution signaled the first step in returning financial freedom to Myanmar.
SDB's soft launch takes place on July 22, with 1,000 private beta users and 100 relationship managers. A full launch is expected in late August. The bank is targeting 100,000 active users in its first six months and aims to hold a pre-ICO round for account holders, and its ICO Round A shortly after.
Myanmar's Crypto Landscape
The launch of the SDB comes at a time when Myanmar's relationship with cryptocurrency is at a crossroads. The country has no concrete policy or regulation that specifically addresses cryptocurrency. However, cryptocurrencies have been mentioned in some related laws, mostly about banning them. In 2020, the Central Bank of Myanmar declared a ban on cryptocurrencies, and in January 2022, the military junta drafted a cybersecurity law that criminalized using cryptocurrency.
Despite these challenges, the people of Myanmar have turned to cryptocurrencies as an alternative currency to escape from the dire financial situation. The country's economy has been severely damaged following the February 2021 coup, with the World Bank estimating an 18% annual contraction. The financial market has been crippled due to the people’s diminishing trust in the banking system and the military-controlled financial system. The exchange rate of Myanmar kyats (MMK) to US dollars (USD) hit an all-time low of 2,200 in September 2021, down from 1,330 in February 2020 before the coup (currently 1 USD = 2,100 MMK).