Vietnam to Build an Appropriate Legal Framework for Cryptocurrencies

By Chetna Phour

Recently Vietnam’s Ministry of Justice submitted a report to the government in Hanoi. The report contains a review of current legislation and assessment of the crypto related business activities in Vietnam. The report also includes several proposals about the changes which are considered necessary by the authors of the report.

According to the director of the Department of Civil and Economic Laws, Nguyen Thanh Tu, the Ministry of Justice surveyed the development of digital assets in Vietnam and abroad; and analysed the pros and cons of the most recent trends. The analysis will help the Vietnamese government to form the basis of further consideration.

With the help of the survey, the Ministry of Justice explored three alternative policies which are applied in different parts of the world.
1. Floating: It involves the implementation of a relatively lax regulatory regime.
2. Prohibiting
3. Legalizing the digital assets transactions under certain conditions

Now the Vietnamese ministries and departments are planning to build an appropriate legal framework to govern digital assets once the executive power chooses the trend it wants to follow. According to Nguyen Thanh Tu, there must be a balance between the risks and potential associated with digital assets to ensure the development of digital assets and blockchain technology and benefits of investors from cryptocurrencies.

Till now Vietnam has not taken a final decision regarding cryptocurrencies. In July this year, the central bank of Vietnam clearly stated that cryptocurrencies are not a legal tender in Vietnam. The bank said that it is not involved in the circulation of Bitcoin or other cryptocurrencies in Vietnam and warned the general public that cryptocurrencies could not be used for payments. Vietnamese securities regulator also warned financial institutions and investment funds to stay away from digital assets. Prime Minister of Vietnam, Nguyen Xuan Phuc ordered the relevant agencies to draft a legal framework for digital assets. According to a report, around 1% of Vietnamese use digital assets and this number is expected to increase 30 times within the next decade.