The government of Vietnam has recently recognized the growing commonplace of virtual currency throughout the world. Governmental institutions are looking to improve the legal environment surrounding all forms of virtual properties which includes cryptocurrencies, such as Bitcoin. The motivation emanates from to desire clamp down on money laundering, tax evasion and foreign currency bleeding as cryptocurrency use and availability grows globally.
To avoid consequences associated with criminality the government hopes to build a regulatory framework that creates a clear and understood tax policy including policies to protect the interests of individual holders of virtual money. There are laws providing guidance on electronic money such as the pre-paid telephone cards but there are discrepancies when applying it to virtual currency. Specifically, the aim is to determine if virtual money is a means of payment, digital good, or property.
While not illegal in Vietnam, the government hasn’t always expressed positive feelings regarding Bitcoin. Previously the Vietnam e-Commerce and information Technology Agency had warned against using virtual money. The agency referenced the State Bank of Vietnam discouraging the use of bitcoin;
“The possession, sale and use of “virtual money” as an underlying asset class is very risky for the people and are not protected by law. State Bank recommends that organizations and individuals should not invest, hold, carry out transactions involving Bitcoin virtual currency and other similar.”
Increase in User Adoption
Currently there are 103.5 million Vietnamese bank cards and 2.2 million electronic wallets used throughout the country on a regular basis. Electronic payments are increasingly becoming a larger proponent of the economy for Vietnam. Pre-paid telephone cards similar the M-Pesa system used throughout part of Africa are commonplace in the country. In addition to making calls, the cards can be used to buy goods and services available online.
Bitcoin has witnessed a steady rise in interest mirroring many other nations, noted by increased Google search entries in Vietnam.
Additionally Vietnam’s largest bitcoin exchange VBTC is showing an increase in trading volume since coming online. Government clarification through law may assist businesses in growing the bitcoin ecosystem within a legal framework.
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