Thailand and Myanmar signed a memorandum of understanding (MOU) supporting the use of both nations’ currencies for border trade. The October 21 announcement came just nine days before the opening of the second Thai-Myanmar Friendship Bridge, which is expected to greatly boost the flow of goods between the two countries.

The agreement was signed by U Kyaw Kyaw Maung, Governor of the Central Bank of Myanmar, and Veerathai Santiprabhob, from the Bank of Thailand. Although the details have yet to be finalized, the agreement seeks to facilitate the use of both currencies for border transactions. Cash transactions are typically conducted in local currencies, but most bank transfers are still made in USD, according to the Myanmar Times.

Thailand is second only to China in cross border trade with Myanmar, with a combined total of USD 3.8 billion on land trade volumes. But the actual amount may be much higher: Vast quantities of smuggled goods move through unofficial crossings controlled by armed ethnic groups who offer easier and cheaper passage. Promoting the official use of local currencies is one of many attempt to entice traders to choose legitimate channels over smuggling.

A new bridge linking the border town of Myawaddy with Mae Sot, its Thai counterpart, also aims to boost legal trade. “Myanmar should try to fulfill the needs of people in border areas such as water, power and infrastructure. If the procedures for commerce become simpler and clearer, legal trade between two countries will grow,” Khun Pakainay, former Thai Minister Counsellor for Commercial Affairs to Myanmar, told the Myanmar Times.