Bitcoin Adoption on Vietnam's Financial Status
Updated: Nov 9, 2021
In the past time, cryptocurrency was an issue that many experts, leaders of organizations and governments of many countries were very interested in. Some cryptocurrencies change value abnormally, causing great damage to many investors, even fraud, multi-level investment, affecting the economy - finance and disorder society. Currently, the Vietnamese government is researching to have a suitable cryptocurrency management solution. Therefore, it is necessary and practical to learn what cryptocurrency is, its value and especially the impact of cryptocurrency on the financial market of Vietnam.
Cryptocurrency can be understood as an algorithmic currency, a digital currency, created by complex cryptographic algorithms based on open source software. Cryptocurrencies are completely traded on the internet and are not controlled by any individual, organization or country. Bitcoin is one of the cryptocurrencies that has impacted Vietnamese finance in recent times.
Bitcoin started trading on the Mt.Gox exchange (Japan) in June 2010, until 2013, Bitcoin was used in both payment, commodity trading and investment assets. The appearance of Bitcoin has caused many harms and risks to users. Firstly, transactions in Bitcoin are highly anonymous, so Bitcoin can become a tool for crimes such as money laundering, drug trafficking, tax evasion, transactions, and payment of illegal assets. Secondly, since the value of Bitcoin fluctuates strongly and complicatedly in a short time, investing in Bitcoin contains many risks of bubbles, potentially causing damage to investors. Furthermore, Bitcoin is not governed and controlled by any state regulatory agency. Therefore, Bitcoin holders will bear the whole risk because there is no protection mechanism.
In the world, most of the countries have announced that they do not accept Bitcoin as a legal means of payment and issued risk warnings for bitcoin users such as Thailand, Russia, France, China, Malaysia, Indonesia, Norway, ... do not recognize Bitcoin as a legal currency to be circulated on the market. In Vietnam, the "mining" and investment in Bitcoin has started to increase recently. Owning Bitcoin due to "mining" in Vietnam is very little, but mainly bought through a number of exchanges. In 2017, more than 7,000 bitcoin miners were imported into Vietnam. The State Bank has sent an official dispatch to the General Department of Customs stating: "The State Bank has no functions and duties related to the state management of the import of the above-mentioned goods". In this dispatch, the State Bank also wants to emphasize that virtual currencies in general and Bitcoin and Litecoin in particular are not currencies and are not legal means of payment according to Vietnamese law. Therefore, Vietnam has not yet recognized cryptocurrency as an inevitable thing, because we have not foreseen its impact on the economy in general and the financial market of Vietnam in particular.
References
Thuy,T. (2019). Current Situation of Cryptocurrency in Vietnam. Asian Journal of Business Environment, 9(4), 29-34. Retrieved from :
Mai,T. (n.d). Tien dien tu la gi? Tien dien tu hoat đong nhu the nao?. Retrieved from:
Tuan,H. (2018). Bitcoin nong sot va bong bong tai chinh. Retrieved from :
https://tuoitre.vn/bitcoin-nong-sot-va-bong-bong-tai-chinh-20171229164925698.htm
Counsel,I. (2021). Cryptocurrency in Vietnam. Retrieved from:
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