State Bank of Vietnam to Establish New Regulations Pertaining to the Cryptocurrency Use

Cryptocurrencies are hot topics nowadays and it is creating a rage of war in Vietnam as the regulators and the State bank of Vietnam (SBV) are working upon a new decree to regulate the cryptocurrency uses in Vietnam. Vietnam is one of those countries of the world that is struggling hard to win the status of being a “developed” nation. Still, a majority of the Vietnamese adult population does not have access to even traditional banking systems, although they have access to the internet and modern hi-tech gadgets. This situation has created the perfect opportunity for digital currencies to be established as a substitute for other financial instruments.

When it comes to blockchain technology, the Vietnamese government becomes a little skeptical as far as the authenticity of the transactions is concerned. As such, SBV has announced the extent of the legality of cryptocurrencies in Vietnam. In the announcement made on behalf of the bank, it affirmed that cryptocurrencies are not in any way a legal mode of payment in Vietnam. Invoking the 2012 decree mentioned in the Article 4.6 of Decree 101, regarding the non-cash payment modes in Vietnam, it says that Vietnam will only recognize cheques, collection orders, payment orders or other SBV prescribed financial instruments. All other forms of payments including Bitcoins, will be considered illegal in Vietnam. In the statement released, the central bank also made it very clear that anyone issuing or supplying any illegal modes of payment, including Bitcoin and other cryptocurrencies, will have to pay the penalty amounting to VND 150 million to VND 200 million, which is approximately 6000 to 9000 USD.

However, the current laws have not specified whether Bitcoin is to be considered as a commodity or a currency or a financial instrument that excludes Bitcoin trading services from the definition of payment processing services. The announcement also prevents the clients from utilizing their institutional accounts to trade digital currencies. This is turn, is paralyzing the country’s microfinance establishments to utilize the blockchain technology as a medium for exchange.