Can Vietnam’s hardline stance on cryptocurrency be a blessing in disguise?
It can be, if you’re looking at it from the right vantage. In July of this year, the State Securities Commission (SSC) banned local companies from providing any related cryptocurrency products, services, or transactions, along with collaborating with any external cryptocurrency ventures. And just one month later, the Vietnamese Customs Department followed through on a proposed ban of all mining imports, mostly models from China’s Bitmain.
Most people would view these policies, even if the Vietnamese government comes around to establishing more cryptocurrency-friendly regulation, as a fatal blow to the industry. After all, other countries in Asia Pacific – including everyone from Indonesia and Korea to Singapore and the Philippines – are racing to launch nation- and city-wide cryptocurrency initiatives and projects, such as cryptohubs in Cagayan and Jeju. Vietnam’s current ban would seem to set it far behind this regional race, and they’re right: The country may never catch up to its peers, at least as it comes to cryptocurrency.
Now that cryptocurrency is effectively banned in Vietnam, the nation’s entrepreneurs, developers, and investors can flock to its underlying technology: blockchain. Though cryptocurrency and the blockchain are often erroneously used in place of one another, the blockchain refers only to the tech. To put it simply, blockchain is a public ledger of records, and it promises to potentially upend many different global industries, such as real estate, digital rights, and healthcare through decentralization.
The cryptocurrency ban in Vietnam, in short, should be viewed as a hidden advantage. It spares the nation’s talent from competing in the hotly contested, regional cryptocurrency battle, and it enables them to focus on the greater opportunity present in blockchain. In doing so, Vietnam can leapfrog its neighbors. While they fight to establish the top cryptohub to varying degrees of success, Vietnam can distinguish itself as the best place for blockchain innovation, in Asia and perhaps even the world.
For Vietnam to be a global blockchain hub, the country’s talent must have the foresight to recognize which platforms in the space can elevate them to success, much in the same way that the Vietnamese developers who were smart enough to build for the App Store or Google Play early on were able to profit handsomely, such as Dong Nguyen, the maker of Flappy Bird. In this view, Vietnamese founders would be wise to take a look at such platforms as XPhone, the new blockchain-based phone made by Indonesia’s Pundi X.
Primarily known for its cryptocurrency point-of-sale system, the XPOS, Pundi X’s foray into smart phones made headlines around the world. The XPhone is built around a blockchain-based operating system, Function X, which even includes FXTP, a new transmission protocol. The XPhone will allow users to make calls and receive messages completely via blockchain nodes, obviating the need for a phone number. This blockchain-based messaging can be toggled on and off via the XPhone’s operating system, which builds upon Android 9.0.
Most promisingly, Pundi X is making it easy for Android and web developers to transition into building apps for their the XPhone’s blockchain-based operating system by building a community and developing the ecosystem. The XPhone is still in its early stages – it will not be released commercially until the second quarter of 2019 – so any Vietnamese entrepreneur or developer that begins developing for the platform early on may have a first-mover advantage in their particular apps category.
Of course, adopting and investing into platforms on the bleeding edge of blockchain technology like Pundi X’s XPhone – or any other for that matter – requires a leap of faith. We must not lament upon what we lost in the country’s cryptocurrency regulation. Instead we should focus on what Vietnam can transform into if the nation’s top tech talent joins together: We can become a global hub for blockchain innovation.
By Janelle Manahan