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Vietnam to Study and Pilot Cryptocurrency

Image credit: Vietnam Plus

Prime Minister Pham Minh Chinh has asked the State Bank of Vietnam to study and carry out a pilot implementation of cryptocurrency based on blockchain technology in the 2021-2023 period. According to a news report, this was highlighted in the Prime Minister’s Decision No 942/QD-TTg about the e-government development strategy towards a digital government.

Cryptocurrency based on blockchain is among core the technologies Vietnam hopes to develop and master. Others include artificial intelligence (AI), big data, and augmented reality and virtual reality (AR/VR). They are expected to create significant breakthroughs as well as favourable conditions for building a digital government. For many years, the State Bank had stressed that cryptocurrencies, including Bitcoin, are not legally recognised in Vietnam and the use of cryptocurrencies as a means of payment is also not legally recognised and protected in the country. The central bank asked credit institutions not to use cryptocurrencies as a type of currency or a means of payment. To date, the central bank has not granted licences for any cryptocurrency trading platforms.

The Ministry of Finance set up a group to study virtual assets and cryptocurrencies under a decision made last April to propose policies and management mechanisms. According to Huynh Phuoc Nghia, deputy director of the Institute of Innovation under the University of Economics HCM City, it is time for the government to study and carry out the pilot implementation for cryptocurrency. Digital money is an inevitable trend.

Currently, traditional currencies have a greater influence on the world currency basket and international trade. However, in the race to develop and apply new technologies, there is chance for countries like Vietnam to impact the global financial system, the report explained. The pilot implementation will help the government explore the positive and negative aspects while developing a more appropriate management mechanism for the technology. While cashless payments are increasing in Vietnam, the recognition of digital currencies by the central bank will help accelerate this process.

The study of cryptocurrency needs to be accelerated to gain advantages in the race, Le Dat Chi, deputy head of the university’s Finance Faculty, said. He cited a survey that found that central banks around the world are having three different responses to cryptocurrency. The first group, which includes 65-68 central banks, is piloting cryptocurrency use. The second is starting to develop a plan for pilot implementation, and the third group is “still observing”. Vietnam is moving from the third group to the second group. However, there are risks to financial and monetary security. It is necessary to have an official definition of cryptocurrency as well as virtual currency, digital currency, electronic money, and digital money.

Earlier in March, OpenGov Asia reported that the Prime Minister agreed to implement mobile money services on a trial basis. The time for trying the service is two years from the date it was licensed. Mobile money can help people in remote parts of the country access paid services on the Internet, including healthcare, education, finance, jobs, and social security. Mobile money is expected to penetrate the rural market and digitise the agricultural value.

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