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Banking & Finance

Bitcoin transactions remain illegal

Released at: 10:31, 31/10/2017

Bitcoin transactions remain illegal

SBV releases statement confirming that all crypto-currencies are illegal in Vietnam.

by Quang Huy

Crypto-currencies such as Bitcoin remain illegal in Vietnam, the State Bank of Vietnam (SBV) confirmed in a statement released on October 28.

“From January 1, 2018, the act of issuing, supplying, or using illegal means of payment may be subject to prosecution in accordance with the provisions of Article 206 of the Penal Code 2015,” the statement read.

The only payment methods allowed in the country are issued or controlled by the SBV, with people attempting to use illegal means of payment being subject to fines ranging from $6,600- $9,000.

Vietnam’s leading technology university, FPT University, raised eyebrows last week by announcing plans to allow students to use Bitcoin to pay for their tuition fees at a time when the country is still looking for ways to manage the virtual currency.

Mr. Le Truong Tung, the university’s Chairman, confirmed the plan, saying that it will allow foreign students to use Bitcoin initially. He said in a Facebook comment following his post that the digital currency is a feasible solution for students from Africa because they face difficulties transferring money out of their home country.

In an interview with local media, Mr. Tung said Bitcoin is a technology product and as a tech university in the age of Industry 4.0, FPT sees it necessary to try using the digital currency.

But critics of the move say it may pit FPT against the government because Vietnam is yet to recognize Bitcoin as legal currency. Others were concerned that the regulation would encourage FPT students to spend most of their time and effort “mining” Bitcoin, a process that experts have warned is very risky.

For now, Bitcoin will remain illegal in Vietnam, according to the central bank, but the government is looking to manage the virtual currency through a new legal framework. Several government ministries and the central bank have been tasked with drawing up such a framework by the end of next year and tax policies for crypto-currencies are to be finalized by June 2019.

Since news of the legal framework was released, Bitcoin has become more attractive in Vietnam, with computer component providers saying they have ran out of graphics cards due to the increasing demand for Bitcoin hardware.

Some service providers have already started accepting Bitcoin and other crypto-currencies in Vietnam, but they are mostly used for trading and speculation on the free market.

The central bank has warned organizations and individuals in Vietnam not to invest in Bitcoin or conduct transactions in the currency, saying they would be taking a huge risk with no legal protection.

“Bitcoin transactions are anonymous and can be used for money laundering, drug trafficking, tax evasion, and illegal payments,” the SBV claimed.

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