Myanmar’s shadow government, the National Unity Government (NUG), is set to start a neobank, which will run on Polygon and do currency swaps via Uniswap v3 pools and USDT stablecoins.
The bank plans to offer users currency swap, fixed deposits and prize-linked savings account services. Its web-based app will have a beta launch on July 22, and be available on Google Play and Apple’s App Store, a spokesperson for the bank said at a virtual press conference held on Thursday.
Led by supporters of the ousted leader Aung San Suu Kyi, the Spring Development Bank (SDB), will target Suu Kyi supporters as customers, including the Burmese diaspora, the spokesperson said. The NUG’s stance is that it is the legitimate sovereign and government of Myanmar, not the military junta.
SDB’s stated objectives are to disrupt the country’s financial system, controlled by the military government, the State Administration Council (SAC). In addition to accessing banking services, users will be able to donate directly to the revolutionary effort via SDB. It plans to deploy funds via the most efficient routes and help rebuild post-revolution Myanmar.
Myanmar has been sanctioned by various governing bodies including the U.S. and the EU over the February 2021 military coup that overthrew the civilian government, and ensuing human rights violations.
The NUG has been raising funds to challenge the SAC since 2021. Its efforts include issuing revolutionary bonds and auctioning off a villa held by army general Min Aung Hlaing. The NUG’s hope is that when it regains power, it will confiscate the house and give the sale proceeds to buyers.
The bank
The NUG’s Ministry of Planning, Finance and Investment is the sole shareholder of the bank. SDB’s shares will be offered to the public in two phases, the spokesperson said.
A pre-initial coin offering (ICO) round with the bank’s own token will be exclusively for SDB account holders and the first ICO round will be offered to institutional investors. The bank said that it will also raise funds via remittance, currency exchange, loans, and other monetary products.
SDB aims to onboard 100,000 active users in six months’ time.
It is set to support four currencies: the Myanmar kyat (MMK), U.S. dollar, Singaporean dollar and Thai baht.
“MMK will be swapped to USDT stablecoin,” an SDB spokesperson told CoinDesk. “The rest will be kept in the original or native currency to minimize currency and exchange risk.”
The NUG recognized stablecoin Tether (USDT) as legal tender at the end of last year.
Using SDB, there is a 2% spread on exchange swap, a more appealing rate than other options on the market. (At the time of this article’s publication, the reference exchange rate was 1 Singapore dollar to 2320 MMK on SDB, compared to 2164 on Western Union.) The bank also plans to launch an e-lottery program on the platform where tickets will be issued to customers as non-fungible tokens (NFTs).
Security
The bank will comply with the Basel Accords and Financial Action Task Force (FATF) regulations, the spokesperson said.
“Normal savings account balances will not be loaned out,” the spokesperson said.
The SDB spokesperson also explained that the bank has various layers of segregation of data, funds and different ‘vaults’ to separate customer funds.
“Our cyber security team (including red team and internal hackers) are working extra hard to protect users’ data security,” the spokesperson said.
For currency swaps, users will be able to deposit foreign currency into the bank and receive stablecoin in return. When the exchange rate is to their liking, they can exchange their foreign currency stablecoin for kyat stablecoin and use a local agent to swap that into cash within Myanmar.
On how they would protect local agents, the spokesperson said that they would draw on two and a half years’ worth of experience in protecting the safety and security of revolutionary forces.
Myanmar has a population of 55 million, many of them young, tech-savvy, and well-versed in VPN use to access content on the internet. QR code payments are more prevalent in Yangon than Singapore. While a predominantly cash-based society, it has extensive and fast 5G coverage with most of its network communications provided by Huawei.