Vietnam to take deep dive into crypto with digital currency implementation pilot

• Vietnam’s central bank will pilot a cryptocurrency implementation program within the next two years.
• The government aims to explore the advantages and pitfalls of virtual assets while developing an appropriate management mechanism. 
• The recognition of digital currencies by the central bank could help accelerate increasing cashless payments in the country.

Vietnam’s Prime Minister has requested that the country’s central bank pilot a blockchain-based cryptocurrency over the next two years as a part of the e-government development strategy. 

Cryptocurrencies to support the rise of cashless payments

Pham Minh Chinh, the Prime Minister of Vietnam, believes that digital currency is an “inevitable trend.” The country’s leader asked the State Bank of Vietnam (SBV) to pilot cryptocurrency implementation from 2021 until 2023.

According to Huynh Phuoc Nghia, deputy director of the Institute of Innovation under the University of Economics HCM City, the crypto pilot aims to assist the government to evaluate the benefits and drawbacks while developing an appropriate management mechanism. 

He added that the country had seen a climb in cashless payments and the “recognition of digital currencies by the central bank would help to accelerate this process.”

Vietnam’s e-government development strategy, which includes cryptocurrencies, also involves assessing artificial intelligence, big data, augmented reality, virtual reality and blockchain technology.

The country’s Ministry of Finance created a research group focused on studying crypto-related regulations in May. Previously, Vietnam has stated that cryptocurrencies are not legally recognized in the country. 

Since 2017, Vietnam has banned the utilization of cryptocurrencies in payments. In 2018, commercial banks and payment service providers were prohibited from making transactions with crypto. The SBV argued that activities associated with digital assets could increase the risk of money laundering, terrorism financing and tax evasion.

At the time, the Prime Minister issued a directive on strengthening the management of activities related to the new asset class. 

The central bank has not clarified its stance on cryptocurrencies since there are no specific definitions for virtual assets within the country. The SBV has not granted any licenses for any crypto trading platforms so far.

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