‘It’s time for the govt to study and carry out the pilot implementation for cryptocurrency’

With cashless transactions on the rise, the recognition and/or adoption of decentralized digital tokens is also gathering momentum in various sectors, and regions around the world. The cryptocurrency market today stood at a trillion-dollar valuation with a global market cap of $1.43 T.

Even so, the world’s regulators and regulatory bodies struggle to reach a generally accepted definition for cryptocurrencies. Consider the World Bank’s approach, which classified cryptocurrencies as a subset of digital currencies.

On the other hand, in spite of the challenges, certain recent developments in this sector showed that these digital assets are here to stay. After El Salvador’s recent move to legalize Bitcoin, many other countries expressed interest in the same.

Vietnam, for instance, was trending in the news after its recent announcement regarding a possible pilot implementation of cryptocurrency. That the country’s laws did not provide a specific definition of cryptocurrencies, did not stop the Vietnamese using the same, as seen in this chart.

Source: Statista

Vietnam’s efforts to adopt cryptocurrency 

Recently, the Vietnamese Prime Minister Pham Minh Chinh  asked the State Bank of Vietnam (SBV) to “study and carry out pilot implementation for cryptocurrency based on blockchain technology in the 2021-2023 period.”

This news came after the 62-year-old leader of the country’s leading Communist Party signed the “Decision No.942/QD-TTg” approving the country’s e-government development strategy, involving evaluation of artificial intelligence, big data, augmented reality, virtual reality, and blockchain technology. This fell in line with Vietnam’s pursuit to develop an electronic government strategy aimed at achieving digital governance.

“The cryptocurrency pilot program was expected to help the government discover pros and cons while developing an appropriate management mechanism,” Huynh Phuoc Nghia, deputy director of the Institute of Innovation under the University of Economics HCM City, told a Vietnamese publication, “The Phnom Penh Post.” He further stated,

“It’s time for the government to study and carry out the pilot implementation for cryptocurrency. Digital money is an inevitable trend.”

Mainstream currencies including the US dollar, Euro, and Yen have been dominating the current world currency basket and international trade. However, with such a step forward in this pool, countries like Vietnam stand a chance to participate in this race.

Le Dat Chi, deputy head of the university’s finance faculty, reiterated a similar point of view. He said,

“The study of cryptocurrency needed to be accelerated to gain advantages in the race.”

He later cited a survey to further shed light on Vietnam’s progress; wherein central banks around the world have three different responses to cryptocurrency. The first group, which included 65-68 central banks, were piloting cryptocurrency use, the second was starting to develop a plan for pilot implementation, and the third group was still observing.

“Vietnam was moving from the third group to the second group,” the aforementioned publication noted. However, Chi also warned of the risks to financial and monetary security.

A different point of view

Previously, the SBV had stressed that cryptocurrencies were not legally recognized in Vietnam. In fact, in 2018, SBV banned commercial banks and payment service providers from dealing with crypto, arguing that such activities could incorporate the risk of money laundering, terrorism financing, and tax evasion.

However, change seemed inevitable as, On March 30, 2021, Vietnam’s Ministry of Finance established a research group to commence an in-depth study of cryptocurrencies, to attain legislative reform for the industry in the country.