A new report in Vietnam on current cryptocurrency regulation and practice has recommended changes to current legislation.
The report, compiled by Hanoi’s Ministry of Justice, has given the government food for thought, including bringing Vietnamese rules on digital currencies in line with other countries overseas where cryptocurrency is more firmly established.
Vietnam has certainly had its teething problems in relation to cryptocurrency trading and adoption through Bitcoin’s rise, with some notable scams and Ponzi schemes over past years, resulting in losses for investors and investigations into ICOs by government authorities. Cryptocurrency is currently not viewed as legal tender and banks have warned against its use.
Reuters claims to have seen a copy of Prime Minister Nguyễn Xuân Phúc’s directive instructing the State Bank of Vietnam to cease allowing financial services that relate to cryptocurrency. The directive included measures to counter money laundering and terrorist activity through cryptocurrency.
The announcement that the government is to build an appropriate legal framework for cryptocurrencies is not a new one; calls for the same were made in 2017 and again after investigations into fraudulent ICOs were carried out in April of this year. By referring back to policies employed by other jurisdictions, the Vietnamese Ministry of Justice was able to explore the options for a framework, such as either implementing a flexible regulatory system, completely prohibiting the use of digital currency, or legalizing the use of cryptocurrency under certain conditions.
Nguyen Than Tu, director of Department of Civil and Economic Laws, has asserted that in analyzing the pros and cons of developing a digital currency environment, both risk and potential are elements which need to be carefully balanced before investors and business can benefit from blockchain and cryptocurrencies.
Reports indicate that 1% of Vietnamese use cryptocurrencies but this estimate has to be balanced with the 15,600 cryptocurrency mining machines imported into Vietnam since 2017, most of which were trackable rigs, not those which slipped under the government radar. Most of the mining rigs went to Hanoi, Ho Chi Minh City, and Da Nang.
Prime Minister Nguyễn has now instructed the relevant government agencies to go ahead with preparing a draft for the country’s first legal digital currency framework. It remains to be seen if, and when, this eventuates.
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