Hey guys..
Today, I want to discuss about a new CBDC call DMMK, Digital Myanmar Kyat and its mobile payment system and mobile wallet called NUGPay.
source: https://www.facebook.com/nugpaymyanmar/photos/a.102348579131655/131832102849969/
Background
After February 1st coup d'état in Myanmar, also known as Burma, democratically elected government lost the control of almost all the infrastructures in Myanmar including communications and banking/finance sector.
Freezing bank accounts and arresting supporters of uprising against repressive military junta is very common. Everything became difficult including withdrawing from ATMs and from the banks. Every financial transactions are monitored and you could get arrested or bank account get freezes for suspicious activities.
According to NUGPay webpage,
The project aims to develop an independent, safe, accessible, and scalable payment system that is equipped to solve the financial constraints that the Myanmar people are experiencing at the moment. It also intends to increase efficiency and security and make cash payments in the Myanmar Kyat (MMK) easier.
National Unity Government NUG, the only legitimate government of the Republic of the Union of Myanmar needs a solution to overcome the difficulties. And blockchain technology came to rescue and DMMK is created based on existing currency MMK.
DMMK Digital Myanmar Kyat
Myanmar Kyat, MMK is official fiat currency of Myanmar. Digital Myanmar Kyat (DMMK) is a fiat-backed digital currency that will perform the functions of a CBDC.
It means, 1DMMK is equivalent to 1MMK. Exchange rate with other currencies shall be announced by MOFPI of Myanmar on weekly basic.
Currently, exchange rate of 4 foreign currencies (USD,EUR, SGD and THB) are available.
NUGPay
As per NUGPay.app,
NUGPay is the newest payment system introduced for the people of Myanmar. It is a mobile wallet application that you can use anytime, anywhere with just one click. Simply download and register to begin using NUGPay.
NUGPay app is currently available for android phones and IOS version is work in progress. Activation code is required to use application and is available though through agents from Myanmar, Singapore and Thailand at the cost of 10,000MMK. Activation cost 3,000MMK and you will be able to use remaining 7,000MMK(or)DMMK balance which is shown in (ks).
My Thought about DMMK
I think it is a good move for the NUG where they lost control over all of the institutions including control over financial institutions. It might be almost impossible to have this kind of service a few years back. I would say it is only possible with blockchain technology.
I guess, currently, the funds flow from overseas to Myanmar for the course of revolution in the form foreign currencies are converted to MMK at the border and flow to respective groups. Some of them go through NUG control bank accounts and some through personal bank accounts. When the internal groups need to buy from overseas, it go in reverse direction. It is just my guess and the problem is they are paying fees to currency exchangers. At the same time, valuable foreign currencies were converted to unstable and highly inflatable MMK.
My guess is, the foreign currencies flow through NUG control bank account will be minted as DMMK and will be circulated in the market as digital form. NUG will hold hard currencies as reserve and back DMMK. Not sure if DMMKs allowed to be converted back to foreign currencies and transfer to overseas bank accounts though. As the reserve is not transparent(to my knowledge), NUG's MoFPI may mint DMMK to a certain safe ratio to the foreign reserved.
Our people like to use cash and it might need to implement ways to cash out from the system. One reason for having agents may be because of this. One possible way I can think of is agent help transfer to existing banking system so that users can cash out. It could cause the same problem of freezing account and arresting. Another problem is merchants will be reluctant to accept in DMMK out of fear.
Centralized or Decentralized?
By looking at the facebook page, users require activation code to use the service and need to renew annually. It may be because they need to pay the developers. App comes with seed phrase, so it is user's responsibility to secure the account. Clearly, CBDCs are centralized. But may be this is the best at the moment. Simply, we can't or don't need to have new type of currency, and need somewhat stable at least not like the volatility of crypto currencies. It my be best to peg with MMK and back by hard currencies.
Technology
Except from the claim that "NUGPay uses the Blockchain-based digital currency", there is no other detail information. It is very likely that the solution is based on existing open source blockchain technology. No information about validators or how transactions will be validated. If you have any thought on this, please let me know.
source : https://pixabay.com/images/id-1090830/
My Suggestions
DMMK and NUGPay is just stared and testing with limited number of users. If I may suggest, MoFPI should consider to provide stake rewards or interest to saving accounts.
If they can tokenize this project in NFT, probably they can use those NFTs as collateral and lend in DMMK.
Bottom line is no matter how good your product is, it is worthless without users. Need to consider attracting users. And it requires quite a lot of effort.
Conclusion
Digital strikes have been working well against repressive junta and I wish this project to be a very successful one. It is very good to see NUG is open to new technologies.
Discussions and suggestions are welcome.
I am not an experience writer even in my own language, so if you find mistakes or if I confuse you, please pardon me.
Pictures and logos are owned by respective owners.
!Cheers
Posted Using LeoFinance Beta
May Wong's twitter post about NUGPay
https://mobile.twitter.com/MayWongCNA/status/1539091469868224512
The rewards earned on this comment will go directly to the people sharing the post on Twitter as long as they are registered with @poshtoken. Sign up at https://hiveposh.com.