Vietnam set to pursue a blockchain-based cryptocurrency project

The Southeast Asian country is looking to become the latest country to adopt a digital currency

Vietnam is reportedly exploring the possibility of recognising and embracing cryptocurrencies. A report shared in the daily newspaper The Phnom Penh Post details that the country’s Prime Minister Pham Minh Chinh is open to the idea of digitising money. Minh Chinh asked the State Bank of Vietnam to evaluate and set an initial trial program for a blockchain-based cryptocurrency.

The pilot program, set to happen in the next two years, is said to be one of the efforts in the e-Government development strategy. The Prime Minister described the shift towards virtual currency as an “inevitable trend.” In addition to cryptocurrencies, the country will also direct its efforts to other disruptive technology aspects as outlined in the approved ‘Decision No.942/QD-TTg’.

The Vietnamese government hopes to leverage the cryptocurrency pilot programme to determine the merits and demerits of virtual currencies. It will additionally use the program as a springboard for managing the implementation and use of digital assets, according to the deputy director of the Institute of Innovation under the University of Economics, Huynh Phuoc Nghia. As explained by Nghia, the recognition of cryptocurrencies will be key in developing and promoting cashless payment options in the country.

At present, crypto payments are outlawed in the country after the government banned them in 2017. The country’s central bank has reiterated in the past that it doesn’t view crypto assets as tangible assets or accepted payment means in the country. The Vietnamese government also imposed fines of up to $8,700 or jail term to anyone found illegally using digital assets.

The county’s central bank enforced, in 2018, a law that proscribed the involvement of commercial banking institutions and payment service providers in crypto. It defended its decision citing concerns about illegal crypto-related activities such as terrorism financing, tax evasion and money laundering.

There have been several stories suggesting that the country intends to regulate crypto assets.  In May, it was reported that the Ministry of Finance had instituted a committee to study cryptocurrencies to help come up with a solid regulatory framework. The development was necessitated by the rapidly increasing popularity of the assets. The central bank is, however, yet to update or clarify its stance on digital assets. It has also not handed out any form of licenses to platforms dealing with virtual assets.