Vietnam building cryptocurrency framework
Vietnam is seriously considering overhauling its current cryptocurrency regulation and practices, according to a new report. The government has had to make some strict decisions, which include bringing Vietnamese rules on digital currencies in line with other countries overseas where cryptocurrency is more firmly established. The report, compiled by Hanoi’s Ministry of Justice, has pushed the government to consider all possibilities.
In Vietnam, cryptocurrency is currently not viewed as a legal tender and banks have warned against using it. In fact, there have been some notorious scams and Ponzi schemes in Vietnam over trading and adoption through Bitcoin’s rise as Vietnam makes its way through its teething problems. These scams and Ponzi schemes have resulted in losses for investors and investigations into ICOs by government authorities.
A copy of Prime Minister Nguyen Xuan Phuc’s directive is claimed to have been acquired by Reuters. This directive instructs the State Bank of Vietnam to stop allowing financial services that have anything to do with cryptocurrency, including terrorist activity as well as money laundering. In fact, the Prime Minister of Vietnam has now told the government agencies to prepare a draft for the country’s first legal digital currency framework. Whether this is actually put into motion or not still remains to be seen.
This announcement calling the government to build an appropriate legal framework for cryptocurrencies has been done before in 2017 and again in April of this year. The Vietnamese Ministry of Justice was able to explore the options for a framework by referring back to policies employed by other jurisdictions. These options include implementing a flexible regulatory system’ legalising the use of cryptocurrency under certain conditions as well as completely prohibiting the use of digital currency.
Elements of risk and potential need to be carefully balanced before investors and business can benefit from blockchain and cryptocurrencies when analysing the pros and cons of developing a digital currency environment. This was stated by the director of Department of Civil and Economic Laws, Nguyen Than Tu. At the time of writing, about 1% of Vietnamese use cryptocurrencies, with about 15,600 cryptocurrency mining machines having been imported into Vietnam since 2017. These rigs exclude those which slipped under the government radar since then, but most were trackable machines which went to Da Nang, Hanoi and Ho Chi Minh City.