Vietnam’s Central Bank also known as the State Bank of Vietnam has completed forming the framework for the use of cryptocurrencies within the country as per the order of Prime Minister Nguyen Xuan Phuc. The Central Bank has ruled that the use of cryptocurrencies like Bitcoin, as a method of payment, is completely prohibited now onwards.
The State Bank of Vietnam has released a new notice listing out several ways for non-cash payment methods within the country that includes some already conventional mechanisms like payment orders, checks and bank cards like debit or credit. Nowhere there is a mention for Bitcoin and hence by default, it is considered as an illegal mode of payment.
The statement coming from Vietnam’s central bank reads “[A]ccording to the provisions of the law, Bitcoin and other virtual currencies are not lawful means of payment in Vietnam; The issuance, supply, [and] use of bitcoin and other similar virtual currencies as a means of payment is a prohibited activity in Vietnam. Under the provisions of Clause 6, Article 27 of Decree No. 96/2014 / ND-CP on administrative sanctions in monetary and banking activities, acts of distributing, including bitcoin and other similar virtual currencies, will be fined fines from 150 million to 200 million [VND].”
The existing stand taken by the Central Bank of Vietnam is contrary to the previous reports wherein it was said that the government is making efforts as instructed by Prime Minister Nyugen to legalise the use of cryptocurrencies within the country.
Cong An – a local newspaper – has reported that any sort of activity pertaining to Bitcoins – like issuing, supply or its use – will be considered as illegal and may be subject to prosecution from January 1, 2018. Also, the latest notice given by the central bank states some rules and fines for those found involved in the activities of cryptocurrencies.
“Use of illegal means of payment (including bitcoin and other similar virtual currencies) will be subject to a fine of between VND 150 million and 200 million [approx. $8,800]. At the same time, as of January 1, 2018, the act of issuing or using an illegal means of payment (including bitcoin and other similar virtual currencies) may be subject to prosecution.”
Vietnam is the second country after Indonesia, which too has issued the ban of cryptocurrencies and its use as a method of payment. It seems that after the Chinese crackdown on cryptocurrencies in September, several other Asian countries are having a close eye on cryptocurrency operations.
Following the Chinese crackdown, the prices of Bitcoin fell by more than 33% from $5000 to $3300 approximately. However, later markets were quick to recover and yesterday Bitcoin price reached a new high of $6250 amid speculations of China lifting the ban on local exchanges and resuming cryptocurrency trading operations.
However, considering the case of Vietnam, unlike China it has always contributed very little to the overall trading volumes and hence such an imposition of the ban is expected to cause hardly any fluctuations in its price.
With two Asian countries banning Bitcoin as a payment method, it would be interesting to see how do its neighbouring economies react to this.