Myanmar exiles ousted in a 2021 coup are pressing the Federal Reserve to endorse their bid to use $1 billion in funds frozen by the US to back a digital currency and a plan to establish a new central bank.
It’s a long-shot measure to help the shadow government led by allies of deposed leader Aung San Suu Kyi bolster its support amid a worsening economic and political crisis in the country sparked by last year’s military coup.
“We just need the US blessing that allows us to use the frozen money virtually,” Tin Tun Naing, the exiled National Unity Government’s minister of planning, finance and investment, said in a video interview with Bloomberg News from an undisclosed location.
The amount sought by the exiled opposition leaders is part of Myanmar’s reserves that have been frozen by the Federal Reserve Bank of New York since February 2021, when the country’s armed forces seized power from the democratically-elected government.
If the exiles can get US support, they would then seek to establish a new central bank that could issue the digital currency to help support the opposition’s “revolutionary efforts,” Tin Tun Naing said. He described the plan to issue currency against the reserves as a more feasible alternative to asking the US to free the cash entirely.
“We know perfectly well that the US is not going to release it in the foreseeable future but we are aiming at making use of these frozen assets virtually,” he said. “This means that we will use this as our foreign reserves when the Central Bank of NUG is established.”
The National Unity Government -- largely made up of lawmakers and officials who won elections in 2020 -- has shown an ability to creatively raise funds to sustain its operations outside Myanmar. The party has sold what it calls “Spring Revolution Special Treasury Bonds”, and held a mock auction of two mansions owned by junta leader Min Aung Hlaing and his family that raised about $53 million.
The US Treasury Department, which helps enforce sanctions, directed questions to the Federal Reserve Bank of New York. A spokesperson for the New York Fed declined to comment.
Major General Zaw Min Tun, lead spokesman for Myanmar’s State Administration Council, didn’t answer calls seeking comment.
The balance of Myanmar’s foreign-currency reserves -- believed to total in the low billions of dollars -- are in Singapore, Thailand and Japan, Tin Tun Naing said. Officials with the central banks in those three countries declined to comment when asked about their holdings of Myanmar assets.
