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Vietnam Regulator Warns Against Using Bitcoin

Last Updated March 4, 2021 4:47 PM
Samburaj Das
Last Updated March 4, 2021 4:47 PM

In a statement, the Department of Electronic Commerce and Information Technology in Vietnam has warned Vietnamese citizens against engaging in investments or the buying and selling of Bitcoin and digital currencies.

The Vietnam e-Commerce and Information Technology Agency – which falls under the purview of the Ministry of Industry and Trade (MOIT) – serves as a regulator to support state management and the enforcement of functions concerning e-commerce and IT to serve the Ministry while in accordance with the laws and regulations.

In a recent press release, the agency warned against the storing or engaging in trade of virtual money, including Bitcoin. The warning includes references to previous bitcoin bans in countries such as Russia and Thailand. It also makes references to monetary losses faced by investors in Japan and Hong Kong, presumably pointing to the closure of the Mt. Gox bitcoin exchange.

The release also points to the stance taken by the State Bank of Vietnam (SBV) in 2014, wherein it explicitly announced that Bitcoin and other virtual currencies are not a legal form of payment or settlement in the country.

Roughly translated, an excerpt from the article that cites an earlier SBV statement from 2014 adds: that “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 [of Vietnam] recommends that organizations and individuals should not invest, hold or carry out transactions involving Bitcoin or other similar virtual currencies,” the reference concludes.

The press release, citing the above factors, then proclaimed:

Therefore, the e-Commerce and Information Technology Agency recommends caution toward consumers and investors looking to buy and sell “virtual currency” or use it to pay for e-Commerce transactions, to avoid the risk of fraud.

An increase in Ponzi schemes and other scams such as the Mt Gox debacle has had regulators in East Asian countries to issue public statements, warning citizens against investing or trading in or with virtual currencies.

Bitcoin Use in Vietnam

As an emerging economy which is also among the fastest-growing economies in the world, Vietnam also shows a burgeoning rate of smartphone adoption and a falling poverty line. Vietnam also has a USD $14 billion remittance market.The potential for the adoption of a decentralized currency in a tech-friendly, emerging economy has tremendous potential.

The summer of 2014 saw the launch of the first Vietnamese Bitcoin exchange in VBTC. The end of 2014 saw VBTC launch the country’s first bitcoin margin trading platform. In September 2015, VBTC launched a service that promised users one-hour international remittance transfers to Vietnam with cash withdrawals available in 9,200 locations across the country.

More recently in January 2016, Bitcoin Vietnam Co. Ltd., and Danish bitcoin merchant services provider Coinify, formed a partnership that could potentially see increased adoption of the cryptocurrency in the country. The partnership will oversee the development of a platform that will enable everyday Vietnamese merchants to receive payments in bitcoin and other electronic and cryptocurrencies (17 in total).

While bitcoin isn’t prohibited in Vietnam in spite of repeated warnings by the Central bank and other regulatory authorities, crytpocurrency payments and funds aren’t protected by law either.

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