How Blockchain Became Myanmar’s Secret Weapon Against a Totalitarian Regime

Myanmar has been under totalitarian regimes with state socialist cooperative policies since the 1960s, consistently subjected to military bureaucracy. To comprehend the impact of blockchain economics on Myanmar, it is essential to first understand the country's economic and political transformation.

\ Since 1962, Myanmar had been under the state cooperative socialist economy under the program called “Burmese Way to Socialism” led by the “Burma Socialist Programme Party – BSPP”. Later, in 1998, the military junta rebranded themselves as “State Peace and Development Council – SPDC” and started their roadmap to transit the economy from state cooperative socialist economy to neoliberal market economy. SPDC dissolved itself after preparing a constitution that gave them perfect immunization from the future governments, and decided to step down the military regime in 2010, and appointed their ex-military generals to form a political party called “Union Solidarity and Development Party - USDP”. Since then, USDP, the proxy party of the Myanmar military junta, was the ruling party until the 2015. Since 1960s up to 2025, Myanmar was only under the democratic government governed by the National League of Democracy which was elected by the will of the people only within the years 2015-2020. Even the NLD government was not fully democratic, the military pre-occupied 25% of the MPs, and controlled the most important ministries such as the Ministry of Defence and the Ministry of Home Affairs. After the 2021 coup, the military junta started to address itself as “State Administration Council – SAC” and officially stated to re-install the state cooperative system.

\ Following the military coup on February 1, 2021, the military junta in Myanmar implemented nationwide internet blackouts and restricted access to social media. Many individuals resorted to using widely available VPNs, both free and paid, to circumvent these restrictions. The SAC regime enacted a new cybercrime law, criminalizing the use of VPNs to access blocked social media and banned media outlets, punishable by imprisonment. Military soldiers and police officers were authorized to conduct surprise inspections of citizens' devices, even in public places and homes, to check for VPN installations. In response, IT professionals with expertise in programming, networking, and system administration leveraged open-source VPN technologies, such as Outline, to set up VPN servers and distribute them within revolutionary circles and to the general populace. Outline VPN's ability to change connection ports during server setup made it more adaptable and resistant to the firewall imposed by the SAC regime with assistance from China's CPC government. Recently, “NymVPN”, a blockchain-based VPN that emphasizes decentralized privacy, became a popular choice due to its 30-day free trial since 2024, with users creating multiple accounts to extend their access.

\ The SAC regime seized the property of individuals involved in fundraising for the revolution, those participating in any form of resistance against the military junta, and those merely supporting the CDM workers (public sector employees refusing to work under the junta). Subsequently, the NUG (National Unity Government of Myanmar) interim government, formed by elected officials, NLD members, democracy activists, and other anti-SAC political parties, introduced a blockchain-based payment platform called "NUGPAY." NUGPAY was revolutionary because it prevented the military junta from tracing transactions, as they did not pass through financial pipelines accessible to the regime. This innovation significantly reduced the risks associated with fundraising. In previous revolutions, such as in 1988, pro-democracy supporters abroad faced the risk of the military tracing their bank transactions and punishing their families in Myanmar. However, with NUGPAY, the SAC regime remained unaware of fundraising activities conducted through the application. Additionally, the NUG partnered with trustworthy pro-democracy individuals worldwide as registered NUGPAY merchants. Despite allowing fundraisers and revolutionary rebels to register for NUGPAY, exchanging money between currencies without registered merchants proved challenging, leading to a middleman economy with potential for corruption and money laundering. Furthermore, NUGPAY had technical limitations, relying solely on the DMMK (Digital Myanmar Kyat) for exchange between MMK (Myanmar Kyat) and other currencies, complicating the exchange process.

\ In response, the NUG government sought alternative banking solutions to create a more transparent and federated fundraising system for the Myanmar Spring Revolution. This led to the establishment of Myanmar's first neobank, the "Spring Development Bank," which replaced the traditional core banking system with blockchain technology. Concurrently, the Myanmar military junta, SAC regime, implemented numerous new regulations targeting established banks. These banks are now unable to permit users to withdraw unlimited amounts of their own money and offer only relatively low interest rates. Additionally, many foreign currency exchangers were arrested by the SAC regime for various reasons, effectively making the possession of foreign currencies nearly illegal (unofficially). This mirrors the past introduction of the "foreign exchange certificate (FEC)" by the SPDC regime, during which the possession of foreign currencies such as U.S. dollars was illegal and punishable by arrest. This historical trauma continues to impact the people of Myanmar.

\ Myanmar has a history of abolishing certain banknotes without reimbursement, causing many households to lose significant wealth they had earned through labour under both the BSPP and SPDC regimes. Additionally, the country has witnessed the dissolution or bankruptcy of its most popular banks without consequences, including Asia Wealth Bank and Myanmar May Flower Bank. During the 1960s, all banks were nationalized under the BSPP regime. Since the 1990s, the SPDC regime permitted private banks while retaining some nationalized banks under military control. Even under the USDP regime, NLD government, and post-coup SAC regime, most banks, though privately owned, are predominantly controlled by family members of BSPP, SPDC and USDP leaders or their business partners.

\ In 2024, the leader of the military junta announced that the SAC administration would reinstate the state cooperative system used during the "Burmese Way to Socialism" era to boost Myanmar's economy. This triggered traumatic memories for many citizens who, or whose parents, endured long queues for basic necessities while the socialist bureaucracy's families became wealthier. Consequently, an increasing number of people attempted to withdraw their savings, further destabilizing Myanmar's banking system. The "Spring Development Bank," Myanmar's first revolutionary neobank closely associated with the NUG government and primarily used for fundraising, attracted many of these individuals. As an incentive, the bank offered high-interest rates for savings, access to the crypto currency market, opportunities to buy foreign currencies virtually, and the chance to purchase gold without keeping them physically. These options were advantageous for the people of Myanmar, providing protection against currency depreciation, inflation, and stagflation, which were consequences of the SAC regime's economic policies. Given the country's history of state socialist cooperative economy and the ironic transition of former socialist leaders and their families into the crony capitalist class, it is understandable that the working and middle classes in Myanmar would panic when the current SAC regime reintroduced socialist rhetoric reminiscent of the BSPP era.

\ Blockchain technology has played a crucial role in the ongoing revolution against a totalitarian regime in Myanmar. The core slogans of the Myanmar Spring revolution, emphasizing "Federalism & Democracy," naturally align with the principles of blockchain technology, including "decentralization," "crypto-anarchy free market economy," "fediverse," and "transparency." This revolution should be remembered as one, empowered and equipped by blockchain technology, enabling a diverse group of individuals to resist an authoritarian regime. It promoted principles such as democracy, federalism, and decentralization.