China assisting Myanmar’s military in developing digital payment systems

Mr. Dan Swift discussed how China is assisting Myanmar’s military in developing digital payment systems, including a central bank digital currency (CBDC), which could enable illicit finance flows at a massive scale, including sanctions evasion. Drawing on his experience as a U.S. diplomat in Myanmar, he described the country’s history of military rule, civil conflict, narcotics production, and organized crime.
He explained that China’s system, supported by Huawei and ICBC, would convert Myanmar’s kyat into digital yuan for cross-border trade via China’s SIPs network, creating layers of anonymity, obscuring beneficial ownership, and posing backdoor risks to the U.S. and other countries. The system could give China control over Myanmar’s economy, provide intelligence on transactions, and be difficult for any future pro-democracy government to reverse.
Mr. Swift warned that similar digital payment models in other high-risk jurisdictions could enable large-scale illicit trade and complicate enforcement of beneficial ownership transparency. He urged regulators and parliaments to monitor alternative payment systems carefully and prepare for the broader implications of such technology for global illicit finance.