The Ministry of Finance of Vietnam has set up a research committee to begin a comprehensive examination of cryptocurrencies with the goal of enacting new legislation to regulate the sector.
While bitcoin trade and use is on the rise around the world, Vietnamese law has no mention of it.
However, the ongoing economic transformation in Vietnam provides a suitable environment for cryptocurrencies to thrive. Apps, QR codes, and e-wallets are becoming increasingly common payment methods in Vietnam as the country moves toward cashless transactions. There is a drive for electronic payments by the government to cut cash transactions by 90% by 2020, which was signed by the Prime Minister in 2017.
It’s projected that by 2030, the number of Vietnamese people utilizing cryptocurrencies would have tripled to one million. In the coming years, the sector is expected to be extremely lucrative.
In spite of this, the country is plagued by cryptocurrency crime, which includes currency thefts, hacks, and cyber scams. Scamming more than 30,000 investors into ill-defined cryptocurrency projects and initial coin offerings, the Vietnamese start-up Modern Tech vanished from the public eye in 2018. (ICO). US$660 million was lost by investors. Therefore, Vietnam’s current problem is to create a legal device for managing and handling virtual assets.
Vietnam Starts To Regulate Cryptos
Until today, Vietnam, like many other countries, had no idea how to deal with the sudden influx of cryptocurrencies into its territory.
Cryptocurrency skepticism is understandable. For example, state-owned banks with no control over cryptosystems are challenged by their immaterial character. Speculation and manipulation, which have the potential to have enormous effects on national economies, are on top of the list of government concerns. Legislative processes are also triggered by virtual currency volatility and a widespread lack of information. As a result, there exist legal voids all throughout the world. Vietnamese law, like it’s written on this website, does not identify or recognize cryptocurrencies as an asset or foreign money at this time, nor does it reference them as a legal mode of payment. It has been explicitly stated by the State Bank of Vietnam that Bitcoin and other cryptocurrencies are unlawful and are not allowed to be used in trade transactions.
There is a punishment of up to US$8,700 and up to six months in prison if you use or supply or issue cryptocurrencies on the territory. Although it is not illegal to own, trade, or invest in cryptocurrencies, it is merely tolerated for the time being.
In any case, a legal void of this magnitude is dangerous, and Vietnam must act quickly to minimize the negative effects of cryptocurrencies.
In the long run, there are countless public, social, and economic advantages to any new rules.
First and foremost, it will give Vietnam a way to tax the cryptocurrency trade, bringing in new income. Previously tax-exempt exchanges of foreign currencies or financial assets may now be subject to business or personal income tax if they are defined as such.
Vietnam should also regulate cryptocurrencies to effectively combat money laundering, hacking, and other unlawful activity associated with virtual currencies.
A safe regulatory environment for cryptocurrency users will be ensured as a result. If that happens, the government’s approach to cryptocurrencies would evolve from passive advice and caution to one of proactive defense.
Crypto Regulation Around The World
Companies that deal in crypto-assets in the United Kingdom are required to register with the Financial Conduct Authority of the United Kingdom (FCA). Crypto companies may apply for a license to operate as “Authorized Payment Institutions” (APIs). BCB Payments Limited received the first UK license for a crypto asset firm. Regulation of crypto-asset enterprises in the UK is required for anti-money laundering (AML) and counter-terrorism financing (CFT) reasons. The UK High Court has ruled that digital currency such as Bitcoin is property under British common law.
Singapore: The Monetary Authority of Singapore (MAS) is authorized to regulate cryptocurrency trade under Singapore’s Payment Services Act,2020. A license is required to operate a bitcoin exchange. Public offerings and digital currency issuance are governed by the Securities and Futures Act of 2001. Those wishing to move their blockchain and cryptocurrency businesses in India know that Singapore is a top choice. A renowned Indian cryptocurrency exchange, CoinDCX, has moved its headquarters to Singapore. – More than INR 100 crores in finance has been acquired for the company since then from worldwide sources of capital In addition, Unocoin, a second Indian cryptocurrency exchange, has emerged.
The government of Indonesia is one of the few in the world to have prohibited cryptocurrencies at one point before permitting their legal usage later on. All payment systems and financial technology providers in Indonesia were banned from handling virtual currency transactions from the beginning of 2018. Regulation of the trade of crypto assets, like commodities, was passed into law by Indonesia’s Commodity Futures Trading Regulatory Agency in 2019. Cryptocurrency futures contracts must be handled in accordance with AML/CFT regulations. Additionally, the Indonesian Financial Transaction Reports and Analysis Center is obligated to receive reports from the organizations.
Canada: In 2018, the Canadian Securities Administrators (CSA) released a notice to make it clear that organizations trading cryptocurrencies or tokens must adhere to securities regulation requirements.. Platforms that promote the trade of crypto-assets will be subject to securities regulation, according to a new notice released in January 2020. All virtual currency enterprises in Canada will be obliged to implement anti-money laundering and anti-terrorism financing (AML/CFT) measures by June 1, 2020, if they haven’t already.
As a consequence, each of these countries has implemented laws controlling the exchange of cryptocurrencies. An anti-money laundering and anti-fraud framework have been put in place for bitcoin businesses. There’s a chance that India may follow suit.