Trying to control the 'uncontrollable': Vietnam pushes for Bitcoin legal framework

By Anh Minh January 6, 2018 | 08:38 pm PT

Bitcoin has been mostly rising in recent months but investors are worried by the market’s inability to cope with sudden shifts in demand. Photo by Reuters

Cryptocurrencies are not officially recognized in Vietnam, but that has not discouraged investors.

Vietnam's central bank has been instructed to compile a legal framework to control Bitcoin and other cryptocurrencies that are not currently recognized by Vietnamese law.

The government office issued the directive this week asking the Ministry of Justice and the State Bank of Vietnam to propose guidelines to help control cryptocurrencies in Vietnam.

The central bank said last October that the act of issuing, supplying or using illegal means of payment starting from 2018 may be subject to prosecution for violating regulations concerning the operation of credit organizations, a crime that carries up to 20 years in jail under Vietnam’s Penal Code.

However, the threat has not scared some businesses who consider it the new age of currency.

Several restaurants and coffee shops in Saigon, Vietnam’s commercial center, are already accepting Bitcoin payments, and the central bank said last month that they will be punished for breaking regulations.

The bank has warned organizations and individuals in Vietnam not to invest in Bitcoins or conduct transactions in the currency, saying they would be taking a huge risk with no legal protection.

“Bitcoin transactions are anonymous and can be used for money laundering, drug trafficking, tax evasion and illegal payments,” it said.

Around the world, policymakers are also skeptical about the currency and have warned investors to act with "extreme caution."

U.S. Federal Reserve boss Janet Yellen has said Bitcoin is not money and called on banks to be certain their digital currency transactions adhere to anti-money laundering statutes.

Bitcoin, the biggest and best-known cryptocurrency, rose around twentyfold last year, climbing from less than $1,000 to nearly $20,000, a record level which was attributed to surging demand in China, where authorities say it is being used to channel money out of the country.

The virtual currency was created in 2009 by an unknown computer whizz using the alias Satoshi Nakamoto. Individual Bitcoins are created by computer code.

The total value of all Bitcoin in existence is now around $152 billion.