A New Dawn For Cryptocurrency In Vietnam? – Fin Tech – Vietnam

Over the past decade, cryptocurrency has been a consistently hot
topic in Vietnam. A recent surge in the price of Bitcoin (BTC) from
approximately USD 4,000 to nearly USD 65,000 in just over a year
has turned up the heat more than ever. According to a recent report by Statista, Vietnam is ranked
second among 74 countries surveyed in terms of the percentage of
respondents who said that they used or owned cryptocurrency in
2020.

The considerable interest of Vietnamese users has in turn
grabbed great attention from the government, specifically regarding
how it can effectively regulate and potentially utilize this type
of currency. Recently, the government issued Decision No.
942/QD-TTg dated June 15, 2021, approving the strategy for
development of e-government toward digital government for 2021-2025
with orientation toward 2030 (“Decision 942”). Decision
942 raised a stir among Vietnamese investors as it seemed to hint
at the government’s growing openness toward cryptocurrency,
which to date has been largely opposed.

Legality of Cryptocurrency in Vietnam

For a general picture of cryptocurrency’s legal status in
Vietnam, it can be briefly summarized that (i) there is no legal
definition of cryptocurrency; and (ii) cryptocurrency is not yet
explicitly recognized as either an asset/property or a means of
transaction.

Thus far, the government’s opposition to cryptocurrency has
been relatively clear. Under Official Letter No. 5747/NHNN-PC dated
July 21, 2017, the State Bank of Vietnam (SBV) explicitly stated
that cryptocurrency in general and BTC and Litecoin in particular
are not legal currencies or means of payment in Vietnam; thus, any
issuance, supply, or use of them as currency or a means of payment
is prohibited, and subject to administrative or even criminal
sanctions.

Later, on April 11, 2018, the Prime Minister issued Directive
No. 10/CT-TTg to agencies including the SBV, the Ministry of
Finance, and the Ministry of Public Security on increasing the
management of activities related to BTC and other cryptocurrencies,
with the aim to control, prevent, and deal with transactions
related to cryptocurrency. In response, two days later, the SBV
issued Decision No. 02/CT-NHNN, which requires credit institutions,
payment intermediary organizations, and SBV units to strengthen
measures to control and deal with transactions related to
cryptocurrency.

Although cryptocurrency is not legal in Vietnam, an interesting
case arose in 2020, when the Criminal Police Department proposed
prosecution of 16 defendants in the case of a robbery of
cryptocurrency (including BTC and other cryptocurrencies)
equivalent to VND 35 billion, under the charge of “theft of
assets/property”. This charge raised a contentious debate over
whether cryptocurrency should be recognized as an asset/property
under Vietnamese law, because otherwise, it would be impossible to
accuse someone of “theft of assets/property” in this
situation.

Does Decision 942 Open a Door for Recognition of
Cryptocurrency?

While Decision 942 does not specifically mention cryptocurrency,
it interestingly assigns the SBV to research, develop, and pilot
the use of “virtual currency” (“ti?n ?o” in
Vietnamese) based on blockchain technology, without elaborating any
further. It remains unclear whether such blockchain-based
“virtual currency” under Decision 942 refers to
cryptocurrency or any other virtual currency.

According to Associate Professor Dinh Trong Thinh, Senior
Lecturer at the Academy of Finance, with this new pilot program,
the government plans to issue a virtual VND (that is, a currency
that is still Vietnamese currency, but has been issued and
circulated in the digital space), and this is not related to
cryptocurrency like BTC. The value of this new virtual currency, if
codified and put into practice, would depend on the
government’s decision, rather than fluctuating in price based
on the market, like other cryptocurrencies. (See related article
in Vietnam Finance.)

It should be noted that in March 2021, Vietnam’s Ministry of
Finance announced that they had established a research group on
virtual assets and virtual currency, with the aim to achieve an
appropriate policy and management mechanism for them.

Are these signs that the government is ready to formally allow
cryptocurrency, and even embrace it? It will be interesting to see
what further steps the government takes to respond to this emerging
trend.

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