Vietnam to curb illegal activity by embracing bitcoin
Vietnam is to sanction virtual currencies, including bitcoin. In a proposal, Vietnamese authorities said the absence of a legal framework for the regulation of virtual currencies was denying the country investment and that the only way to curb illegal activity connected to digital currencies was through acceptance and regulation. The development highlights a change of heart on digital currencies for Vietnam; the Bank of Vietnam banned bitcoin in 2014, although a number of bitcoin exchanges were still established. Vietnam now has 2.2 million electronic wallets.
Vietnam is set to join the growing list of nations that have legitimized Bitcoin. In the latest move, the government of the South East Asian country hinted at sanctioning virtual currencies, including Bitcoin.

Absence of legal framework an obstacle for Bitcoin’s adoption

In a proposal, the Vietnamese authorities revealed that the lack of a legal framework regulating virtual currencies is robbing the country of investments.

More so, just like the unfounded fear of many other governments that Bitcoin and other virtual currencies are a conduit for money laundering, smuggling, terrorism and tax evasion, they believe that the only means of curbing these harmful elements is through acceptance and regulation.

Authorities are confident that confusion and criminal activities related to virtual currencies in Vietnam originate from the lack of existing legal framework and the regulatory environment.

The Vietnamese government’s recognition of the benefits of virtual currencies is a positive development. In fact, its statement acknowledges that Bitcoin offers people the opportunity to undertake fast, convenient and lower cost transactions devoid of counterfeiting making businesses efficient and profitable. The government is therefore poised to avail these benefits to its people by ensuring a legal and regulatory framework is in place.

What is the government’s next step?

At the moment the government wants to streamline the industry so as to be able to tax, monitor and eliminate any so-called negative impacts. It intends to protect users from swindlers and any other significant ramifications that the use of virtual currencies poses. All directions point to a Vietnamese state that is poised to bring Bitcoin and other digital currencies to the mainstream.

However, the government’s sudden change of heart towards cryptocurrency may also point to their inability to ban and prevent the citizens of Vietnam from using them. It will be recalled that the Bank of Vietnam in 2014 banned Bitcoin and named the Dong as the only means of payment singling out Bitcoin as a threat to the country.

This directive did not deter the populace from using Bitcoin. It resulted in Bitcoin exchanges springing up to serve the needs of the people to hold satoshi. Vietnam now has 2.2 mln electronic wallets. The possibility the government has given up in restraining Bitcoin use and to have a share of the cake is glaring.