Vietnam is Working on a Crypto Policy, Again!
Vietnam, unlike most countries, is late to cryptocurrencies, but that hasn’t hindered its ability to take initiative on its own cryptocurrency implementation program. Vietnam’s change of PM has come with a newfound interest in cryptocurrencies. The central bank is also researching to see whether going all-in on crypto is a good venture in the long term.
Vietnam’s Uncertainty regarding cryptocurrencies!
Vietnam was actually on the way to legalize Bitcoin and other cryptocurrencies in August of 2017 as the Prime Minister at the time, Nguyen Xuan Phuc asked the Central bank and Ministry of Finance to research and prepare a legal framework that recognized cryptocurrencies. It was assumed that the process of establishing taxing laws around cryptocurrencies would take about 2 years.
However, the Prime Minister did not entertain this for long as only 2 months later the country witnessed a full-on ban on cryptocurrencies. This came as a shock to many companies that were already invested in the industry and universities that were in the midst of accepting Bitcoin as a convenient payment method. In addition to enforcing a ban, it also made sure to implement severe sanctions in case any organization did violate this new law. This complete U-turn by the PM puzzled everyone as it had previously initialized the construction of a legal framework that involved cryptocurrencies, only to completely disregard it.
The ICO scam that left a bad impression of Cryptos!
ICOs have universally tarnished the image of cryptocurrencies, and this is also evident in the big $658 million (15 trillion dongs, Vietnam’s official currency)scam that took place in Vietnam. The two main perpetrators Ifan and Pincoin, two cryptocurrency start-ups that were apparently under Modern Tech, based in Ho Chi Minh, Vietnam’s largest city. The ICO was in the form of a pyramid scheme that encouraged investors to bring more people, which resulted in 32,000 investors losing their money. The agitated investors revolted by protesting in front of the Major Tech’s office after realizing that the tokens that they were being rewarded with couldn't be exchanged for cash.
The two startups boasted about large returns and guaranteed profits luring in less fortunate people who are more vulnerable to such frauds. It is also important to note that this scam took place in April of 2018 when there was an active ban on cryptocurrencies.
Vietnam’s Present-day view on cryptocurrencies!
It is legal to own, trade, and invest in cryptocurrencies, although creating tokens and providing them is strictly inhibited. The Ministry of Finance has already established a group to study cryptocurrencies earlier this year. It will be looking into the impact of digital currencies on the economy and constructing regulations around them. Along with monitoring the volatility of the market while considering other altcoins that display more stability and thus longevity. The country is also well aware of the benefits of taxing foreign exchanges for the services they offer.
Vietnam has also witnessed a rise in digital payments systems. This is partly motivated by the majority of people owning digital currencies. Although the use is quite limited as there is no policy in place for such currencies to flourish.
The new PM of Vietnam Phạm Minh Chinh is looking to get Vietnam back in the Crypto industry. He has also asked the Central Bank to take measures to establish a digital currency and take the time to learn about them. It is obvious that the country might be looking into CBDCs. Vietnam also wants to become a more competitive power by setting a strong policy before other countries and prepare it for an economy that will be backed by digital currency. The country also recognizes the influence that countries will have when more of their central banks begin to develop a currency of their own that is digital.