Government calls for framework on cryptocurrencies

Deputy Prime Minister Vuong Dinh Hue has urged the State Bank of Vietnam (SBV) and the Ministry of Justice to quickly compile and submit a framework for the legalization of cryptocurrencies to the government before the end of this month.

A report from 2016 said the country would consider taking a more open stance on cryptocurrencies and other disruptive financial technologies. As the appearance of Bitcoin has resulted in many civil and commercial disputes and criminal acts, the government believes virtual currencies need to be managed and supervised.

An assessment on how the government should approach the process is due to be completed by August. It is then expected that the drawing up the legal documents required to recognize cryptocurrencies under a regulatory framework would be completed by the end of the year.

Officials will also begin work on tax treatment for cryptocurrencies, with a system governing how users will be taxed to be in place by June 2019.

Meanwhile, the central bank has continuously reiterated that the issuance, supplement, and use of Bitcoin and other cryptocurrencies for legal payment is prohibited in Vietnam. It has since coordinated additional sanctions for acts involving the illegal virtual currencies.

“From January 1, 2018, the act of issuing, supplying, or using illegal means of payment may be subject to prosecution in accordance with the provisions of Article 206 of the Penal Code 2015,” an SBV statement from last October read.

The only payment methods allowed in the country are issued or controlled by the SBV, with people attempting to use illegal payment means being subject to fines ranging from $6,600-$9,000.

Since news of the legal framework was released, Bitcoin has become more attractive in Vietnam, with computer component providers saying they have run out of graphics cards due to the increasing demand for Bitcoin hardware.

Some service providers have already started accepting Bitcoin and other cryptocurrencies in Vietnam, but they are mostly used for trading and speculation on the free market.

The central bank has warned organizations and individuals in Vietnam not to invest in Bitcoin or conduct transactions in the cryptocurrency, saying they would be taking a huge risk with no legal protection. “Bitcoin transactions are anonymous and can be used for money laundering, drug trafficking, tax evasion, and illegal payments,” the SBV claimed.

[Source: vneconomictimes 8th January 2018]