Vietnam issues full ban on Bitcoin and all other cryptocurrencies

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Busy roundabout in Nha Trang © Arno Maierbrugger

While the value of the digital currency Bitcoin is going through the roof – 1 BTC on November 3 hit the $7,462-mark in day trading for the first time –, the State Bank of Vietnam announced an outright ban on any Bitcoin payments in the country, and on the use of all other cryptocurrencies, for that matter.

In a statement issued on October 30, the Vietnamese central bank said that cryptocurrencies were “not a lawful means of payment” in the country, and the “issuance, supply, use of Bitcoin and other similar virtual currency as a means of payment is prohibited.”

From next year, illegal use of cryptocurrencies in payments will be subject to penalties of up to 200 million dong ($8,800), the statement continued. There is no explanation as to why the bank decided to do this, and the order does not mention blockchain as a technology or the act of mining virtual coins.

There is already a first victim of the new law. According to news portal VietnamPlus, FTP University in Hanoi, which recently announced it would allow students to pay for tuition in Bitcoin, will now be forced to reverse that decision. Representatives of the State Bank of Vietnam reportedly stated that, if the university continued to treat Bitcoin as a “legal means of payment,” it would be “committing an act of violation under the current law provisions, and may subject the university to the appropriate sanction.”

Bitcoin and other virtual currencies came to Vietnam in 2009 and had since experienced rapid growth each year in terms of users and an average daily transacted value in thousands of US dollars, according to reports from the General Department of Vietnam Customs.

While Bitcoin and virtual money is allowed in most countries around the globe, Vietnam joins a small group of nations which have banned them by law, namely Bolivia, Ecuador, Kyrgyzstan, Bangladesh and Nepal. In China, individuals can use and trade cryptocurrencies, but regulation prohibits financial firms like banks from doing the same. However, in early November, Beijing ordered a shutdown of virtual coin exchanges in mainland China and banned all initial coin offerings (ICO) in the country. South Korea did the same shortly after and ruled ICOs unlawful. Other countries considering a full ban are Russia, India and Colombia.

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Reading Time: 2 minutes

Busy roundabout in Nha Trang © Arno Maierbrugger

While the value of the digital currency Bitcoin is going through the roof – 1 BTC on November 3 hit the $7,462-mark in day trading for the first time –, the State Bank of Vietnam announced an outright ban on any Bitcoin payments in the country, and on the use of all other cryptocurrencies, for that matter.

Reading Time: 2 minutes

Busy roundabout in Nha Trang © Arno Maierbrugger

While the value of the digital currency Bitcoin is going through the roof – 1 BTC on November 3 hit the $7,462-mark in day trading for the first time –, the State Bank of Vietnam announced an outright ban on any Bitcoin payments in the country, and on the use of all other cryptocurrencies, for that matter.

In a statement issued on October 30, the Vietnamese central bank said that cryptocurrencies were “not a lawful means of payment” in the country, and the “issuance, supply, use of Bitcoin and other similar virtual currency as a means of payment is prohibited.”

From next year, illegal use of cryptocurrencies in payments will be subject to penalties of up to 200 million dong ($8,800), the statement continued. There is no explanation as to why the bank decided to do this, and the order does not mention blockchain as a technology or the act of mining virtual coins.

There is already a first victim of the new law. According to news portal VietnamPlus, FTP University in Hanoi, which recently announced it would allow students to pay for tuition in Bitcoin, will now be forced to reverse that decision. Representatives of the State Bank of Vietnam reportedly stated that, if the university continued to treat Bitcoin as a “legal means of payment,” it would be “committing an act of violation under the current law provisions, and may subject the university to the appropriate sanction.”

Bitcoin and other virtual currencies came to Vietnam in 2009 and had since experienced rapid growth each year in terms of users and an average daily transacted value in thousands of US dollars, according to reports from the General Department of Vietnam Customs.

While Bitcoin and virtual money is allowed in most countries around the globe, Vietnam joins a small group of nations which have banned them by law, namely Bolivia, Ecuador, Kyrgyzstan, Bangladesh and Nepal. In China, individuals can use and trade cryptocurrencies, but regulation prohibits financial firms like banks from doing the same. However, in early November, Beijing ordered a shutdown of virtual coin exchanges in mainland China and banned all initial coin offerings (ICO) in the country. South Korea did the same shortly after and ruled ICOs unlawful. Other countries considering a full ban are Russia, India and Colombia.

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