The Vietnamese government has ordered its central bank to study virtual money using blockchain technology over three years amid rising interests in this type of currency.
For now, cryptocurrencies remain an illegal means of transaction in Vietnam.
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The State Bank of Vietnam will be in charge of studying and trialing the use of virtual money from this year until 2023 as part of key objects in mastering core technologies, according to a government decision.
The government does not give a clear definition of virtual currency and assets, VNExpress reported.
For now, cryptocurrencies remain an illegal means of transaction in Vietnam. However, the trading of Bitcoin and the like is popular with many investors using foreign platforms and social media to make money from this asset.
There is no definition of cryptocurrency under the laws of Vietnam. Vietnam has the second highest rate of cryptocurrency usage among 74 economies, according to a survey by market researcher Statista.
Cryptocurrency is referred to a wide array of technological developments that utilize a technique better known as cryptography. In simple terms, cryptography is the technique of protecting information by transforming it (i.e. encrypting it) into an unreadable format that can only be deciphered (or decrypted) by someone who possesses a secret key.
Cryptocurrency is secured via this technique using an ingenious system of public and private digital keys. However, no generally accepted definition has been agreed so far.
What are the risks associated with cryptocurrency trading in Vietnam?
Currently, the Government of Vietnam has not yet issued license to any organization wishing to do cryptocurrency business in Vietnam.
Doing cryptocurrency business in Vietnam without license shall be subject to administrative sanctions in accordance with the laws of Vietnam. Specifically, any investor doing cryptocurrency business in Vietnam without license shall be subject to an administrative penalty of VND50,000,000 to VND100,000,000 and the foreign exchange operations of the credit institution shall be suspended for three to six months.