Myanmar nationals working in Thailand form the largest single migrant- worker corridor in Southeast Asia, and remittances they send home are a critical source of household income and national foreign exchange for Myanmar. Yet the overwhelming majority of these flows continue to move through informal channels — principally the hundi system — rather than through banks or licensed money transfer operators.

This paper sets out the case for both governments to treat remittance formalization and labour migration reform as a single, connected policy agenda. It explains why the persistence of informal-channel remittances matters for both countries; examines, in depth, the full range of factors driving workers toward informal channels rather than cost alone; analyzes the problems in the current legal migration framework that leave a large share of workers undocumented and therefore excluded from formal finance; sets out the benefits of reform to both countries with supporting data; and closes with a set of concrete, sequenced recommendations. Critically, the paper does not recommend loosening financial-sector documentation standards, which would risk non-compliance with international AML/CFT norms. Instead, it recommends strengthening the legal migration pathway itself, allowing worker remittances to use a more competitive exchange rate, as well as facilitating direct Thai baht settlement of remittances and related trade payments — building on an authorization Myanmar’s own central bank has already issued — to incentivize the use of formal channels.