Vietnam Is Planning to Revise Its Cryptocurrency Policies

Vietnam Is Planning to Revise Its Cryptocurrency Policies

The Vietnamese government is looking to complete a legal framework to manage and handle digital assets and cryptocurrencies. Vietnam’s Ministry of Industry and Trade, Ministry of Information and Communication, and Ministry of Justice are taking steps to legalize virtual currencies by 2018. State officials are reviewing current policies and will submit a report by December 2017.

The Vietnamese government hopes to protect consumers by strengthening laws and regulations, furthering prohibition, and actively cautioning the public about the risks involved in dealing with digital money.

However, Vietnam has struggled with cryptocurrencies in the past. In 2014, the State Bank of Vietnam (SBV), the country’s central bank, urged organizations and citizens to resist using cryptocurrencies. Bui Quang Tien, Head of the SBV Payments Department stated:

"Bitcoin and other virtual currencies are not legal tender or permitted means of payment in Vietnam.“

Despite the SBV’s admonition on the use of cryptocurrency in 2014, Vietnam is now home to roughly 2.2 million digital cryptocurrency wallets. The Vietnamese government is taking action to secure investment opportunities and deter crime through regulation, in order to spur the growth of potential digital money assets. 

Digital currency pyramid schemes have been a prevailing problem that the central bank has pointed to when warning consumers against the risks of holding cryptocurrencies. The utilization of cryptocurrencies for money laundering, tax evasion, and weapons sales have also become legitimate concerns, due to the lack of regulation in the country.

Yet, despite the woes voiced by the government, digital currencies have been thriving in Vietnam. There has been an increase in investment and business transactions in the northern border provinces, central provinces, and the central highlands. Additionally, in 2014, two virtual currency exchanges were started in Vietnam. One of the two, Vietnam Ltd., a Ho Chi Minh based company, operates an exchange where you can trade cryptocurrency for local fiat currency.

Higher cryptocurrency use creates more opportunities for this growing ecosystem. It opens the door to investments for Ethereum-based projects, creates demand for real-working Dapps, and furthers the development of blockchain-based platforms. With added regulatory measures, this can potentially ensure more growth and research into cryptocurrencies, the blockchain, and innovative Ethereum-based projects that will service South Pacific economies.