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Vietnam Bans Bitcoin as Payment Method; Adopters Face $9,000 Penalty

Last Updated March 4, 2021 5:01 PM
Samburaj Das
Last Updated March 4, 2021 5:01 PM

Vietnam’s central bank has ruled that cryptocurrencies like bitcoin are prohibited as a method of payment in the country.

The State Bank of Vietnam (SBV), Vietnam’s central bank, has completed developing a legal framework for cryptocurrencies in the country following orders by Vietnamese Prime Minister Nguyen Xuan Phuc earlier this year.

In a newly released notice  today, the central bank listed the recognized exceptions among non-cash payment methods approved by the authority. They include conventional payment mechanisms such as checks, payment orders and bank cards (credit and debit). Bitcoin isn’t among them and is, by default, ruled as an illegal payment instrument.

An excerpt from the central bank’s statement read:

[A]ccording to the provisions of the law, Bitcoin and other virtual currencies are not lawful means of payment in Vietnam; The issuance, supply, use of bitcoin and other similar virtual currency as a means of payment is prohibited in Vietnam.

The information still does not reveal any explicit guidelines on cryptocurrency mining and it is unclear if the “issuance and supply” of bitcoin extends to cryptocurrency exchanges.

The central bank’s official stance is now contrary to previous reports that claimed the Prime Minister’s impetus to push for a framework was toward legalizing cryptocurrencies. As reported in August, the intended plan at the time was to release legislative drafts to legalize cryptocurrencies by August 18 ahead of tax guidelines for adopters in mid-2019.

Furthermore, today’s notice also revealed details of fines and the possibility of further prosecution for cryptocurrency adopters.

The authority said:

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. $9,000]. 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.

The SBV’s position on cryptocurrencies is similar to that of its Indonesian counterpart. Last week, Bank Indonesia (BI) governor Agus Martowardojo stated bitcoin isn’t recognized as an official method of payment by the central bank with the added threat that adopters “who use it will be dealt with.”

It has to be reiterated that the prohibitive stance isn’t a blanket ban on cryptocurrencies in Vietnam or Indonesia and ‘only’ extends to their use as payment instruments.

Featured image from Shutterstock.