YANGON
The future of blockchain, the potentially revolutionary new verification method for digital transactions, was presented last week to the business community in Yangon. Blockchain Development & Research Company Limited jointly presented with China’s Guiyang Institute of Blockchain, with whom they have signed a memorandum of understanding. The DCD Group Sdn Bhd of Malaysia and Gexbit Pte Ltd of Singapore acted as co-organisers of the event at the Signature Restaurant.
It is understood that the Blockchain Development & Research Company Limited is the first public blockchain technology company in Myanmar. Their expressed goal is two fold, to develop blockchain applications (in areas like banking, government data management, commerce and trade), and to create the country’s first Bitcoin exchange.
At present, there is also no easy way for Myanmar citizens to purchase Bitcoin, done so on a platform known as a bitcoin exchange. Aung Bo Bo Lin, a director of the Blockchain Development & Research Company, wants to run the first bitcoin exchange to allow for the direct transfer of MMK to Bitcoin (BTC). But to achieve this, the Myanmar government must amend the regulatory environment to allow the exchange of digital currency. The government does not currently recognise cryptocurrencies (of which Bitcoin is one of many) as a currency foreign currency. Once/if recognised as a currency, we assume that the next step would be the Myanmar Central Bank granting a licence similar to the existing Foreign Exchange Dealer licence to the bitcoin exchange. From there, sales of bitcoin could be regulated similar to the sale of USD inside Myanmar.
Some countries, like Japan, and potentially Malaysia later this year, have recently recognised cryptocurrencies as valid form of payment, and require financial service providers dealing with cryptocurrencies to comply with existing domestic Know Your Customer and Anti-Money Laundering laws. And last month, the Japanese government announced that it had approved 11 cryptocurrency exchanges in the country, having confirmed that they complied with strict data security, money laundering and other regulations intended to reduce illegal uses of cryptocurrency. But in contrast, China has effectively stopped bitcoin exchanges from trading in its borders, preferring stronger control over the use of currency inside its borders. Only time will tell how Myanmar will deal with this multi-layered problem, considering the black market’s reliance on USD, high inflation rates, and the lack of trust in the Kyat internationally.
Aung Bo Bo Lin hopes that the Myanmar government will soon certify BTC as a foreign currency, and grant his company some kind of foreign exchange licence to trade bitcoin for MMK. Until then, the company is going ahead with its plan to develop its own Initial Coin Offering (ICO) as a way to raise funds to continue research into potential applications of this new technology, similar to crowdsourced equity funding round.
Consult-Myanmar is excited to see the development of potential opportunities presented by blockchain technology. Especially with developing countries experiencing corruption, tax avoidance and government inefficiencies, this is a great chance to revolutionise the way both public and private entities do business, greatly improving accountability and the rule of law. There is a concern in the financial industry that the many new coins exist in a heavily overpriced bubble, but the general technology concept behind them remains sound. The next step for the Blockchain Development & Research Company will surely be the release of their white paper, so that the industry can better understand their business model, before deciding whether to invest.
About the author:
Ben Roache has a Bachelor of Laws/Bachelor of Arts (Double Major: Asian Studies & Japanese) from the University of Adelaide. This article was written as part of a research project on the fintech sector in Myanmar that he was involved in while at Consult-Myanmar, a Yangon-based consulting firm.
