No legalizing bitcoin, Vietnam says

Vietnam’s official line on bitcoin and other cryptocurrencies is that they cannot be legalized because they are unsafe and ineffective.

This perspective was laid out by Deputy Prime Minister Vuong Dinh Hue when he responded to a request from a National Assembly deputy at the recently concluded parliamentary session.

Bitcoin and other cryptocurrencies go through strong fluctuations and lack the stability of national currencies, Hue told NA member Huynh Thanh Chung.

For instance, Hue said, last year, Bitcoin prices had soared to almost $20,000 per coin in December, 20 times the price at the beginning of that year. And just two months later, it had lost two-thirds of its value.

“The high volatility makes it impossible for Bitcoin to have efficient storage value,” the deputy PM added.

Another reason that cryptocurrency cannot be a monetary tool in Vietnam is that it is not very popular among businesses. There are very few businesses that accept or do their accounting in Bitcoin and other cryptocurrencies, Hue said.

He also noted that no country in the world has acknowledged Bitcoin or any other cryptocurrency as a currency backed by the government, the central bank and its laws.

Most cryptocurrency transactions are now related to investment or speculation, not as a medium for trade or paying for a service, Hue said.

He said the Vietnamese government will continue to study and update itself on cryptocurrency developments.

According to cryptocurrency platform CryptoCompare, 80 percent of Bitcoin transactions originated in Asia in November last year, mostly China, Japan, Korea and Vietnam, the four largest cryptocurrency markets in the region.

Vietnam has constantly been in the top five countries with the highest traffic to Bitcoin trading platform and Bitcoin news site, CryptoCompare data shows.

More than 9,300 cryptocurrency diggers were imported to Vietnam last year, mostly distributed in Hanoi, Ho Chi Minh City and Da Nang, according to Vietnam Customs.