Prime Minister of Vietnam Asks Central Bank to Test Digital Currency – Regulating Bitcoin News

Pham Minh Chinh, the Prime Minister of Vietnam, has asked the country’s central bank to conduct a study on cryptocurrency and pilot the implementation of a blockchain-based currency within the next two years. The efforts are part of the Asian country’s new e-government strategy.

Cryptocurrency highlighted in Prime Minister’s decision

Cryptocurrency is one of the highlights in a recent decision by the Vietnamese Prime Minister to set up a digital government. “The blockchain-based cryptocurrency is one of the core technologies that Vietnam hopes to develop and master,” Vietnam Plus said in a report, apparently referring to a coin issued by the state. Further focus areas are artificial intelligence, big data as well as augmented and virtual reality, according to the English-language news agency.

Before mastering crypto, however, the Vietnamese government must adopt specific definitions for the various types of digital currencies and virtual assets, as well as regulate the crypto space comprehensively. A working group was set up by the Treasury Department in April last year to investigate the matter and propose regulatory measures.

The State Bank of Vietnam (SBV) has warned in the past that cryptocurrencies like Bitcoin are not legally recognized in the country. The same applies to their use as a means of payment. The central bank previously ordered financial institutions not to consider crypto as a currency, and the regulator has not yet licensed any coin trading platforms.

According to Huynh Phuoc Nghia, deputy director of the Institute of Innovation at Ho Chi Minh City University of Economics, it is time for the Hanoi government to study and conduct a pilot implementation of the digital currency. The academic emphasized:

Digital money is an inevitable trend.

The pilot implementation should help the executive branch identify both positive and negative aspects and develop a “more appropriate management mechanism,” said Nghia. In his opinion, the recognition of digital currencies by the SBV will facilitate this process.

Vietnam wants to catch up with other nations in the digital currency race

Le Dat Chi, deputy head of the university’s finance department, believes the study should be accelerated to allow Vietnam to advance in the global digital currency race. According to a survey he cited, central banks around the world are at different stages of this effort. More than 60 institutes are already conducting a pilot test for the use of digital currencies, others are working on plans for a pilot implementation, while a third group of banks is only observing the development. Vietnam now wants to move on to the second stage.

Traditional currencies such as the US dollar, the euro and the Japanese yen have a greater impact on the world currency basket and international trade than other fiat currencies, Vietnam Plus notes. But in the race to develop and apply new technologies, countries like Vietnam have the chance to increase their influence on the global financial system, the publication said.

Central banks working on projects to issue central bank digital currencies (CBDCs) include those of China, Russia, the United States, and the euro zone. People’s Bank of China has the most advanced project yet, with numerous ongoing tests domestically and a plan to test the digital yuan (e-CNY) in cross-border transactions with Hong Kong.

Do you expect Vietnam to implement crypto-friendly regulations and issue a blockchain-based digital currency? Do share your thoughts on the matter in the comments below.

Tags in this story

CBDC, central bank, cryptocurrency, digital currency, digital government, e-government, pilot, prime minister, regulations, regulator, state bank, study, Vietnam, Vietnamese

Photo credits: Shutterstock, Pixabay, Wiki Commons

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