Vietnam’s central bank has decreed that cryptocurrencies like XBT (Bitcoin) are banned as a mode of payment in the country.
The State Bank of Vietnam (SBV), Vietnam’s central bank, has completed formulating a legal framework for cryptocurrencies in the country according to the instructions provided by Vietnamese Prime Minister Nguyen Xuan Phuc earlier this year.
In a recently issued announcement today, the central bank listed the identified exclusions between non-cash payment modalities endorsed by the authority. They include traditional payment methods such as checks, payment orders and bank cards (credit and debit). Bitcoin isn’t among them and is, by default, ruled as an unlawful payment method.
An extract from the central bank’s announcement read:
“According to the provisions of the law, Bitcoin and other virtual currencies are not lawful means of payment in Vietnam; The issuance, supply, use of bitcoin and other similar virtual currency as a means of payment is prohibited in Vietnam.”
The information still does not disclose any specific framework on cryptocurrency mining and it is not clear if the “issuance and supply” of bitcoin spans to cryptocurrency exchanges.
The central bank’s official stand is now contradictory to earlier reports that stated the Prime Minister’s motivation to strive for a framework was to legalize cryptocurrencies. As stated in August, the expected ploy at the time was to publish legislative drafts to legalize cryptocurrencies by August 18 prior to the tax guidelines for adopters in mid-2019.
Moreover, today’s announcement also unveiled details of fines and the likelihood of more prosecution for cryptocurrency adopters.
The authority said:
“Use of illegal means of payment (including bitcoin and other similar virtual currencies) will be subject to a fine of between VND 150 million and 200 million [approx. $9,000]. At the same time, as of January 1, 2018, the act of issuing or using an illegal means of payment (including bitcoin and other similar virtual currencies) may be subject to prosecution.”
The SBV’s stand on cryptocurrencies is identical to that of its Indonesian counterpart. Last week, Bank Indonesia (BI) governor Agus Martowardojo said bitcoin isn’t identified as an official mode of payment by the central bank with the added challenge that adopters “who use it will be dealt with.”
It has to be emphasized that the restrictive stand isn’t a total ban on cryptocurrencies in Vietnam or Indonesia and ‘only’ spans to their use as payment methods.