Vietnam To Soon Pilot Its Central Bank Digital currency (CBDC)
On July 4th Vietnamese Prime Minister Pham Minh Chinh asked the State Bank of Vietnam (SBV) to pilot a national digital currency based on blockchain. The initiative is part of the PM’s new e-Government development strategy and has a two-year timeline. The PM claims that the digitization of money is an “inevitable trend.”
Cryptocurrency has been the focus of the decision, concerning the establishment of the new digital government strategy. According to news reports, some say Cryptocurrency based on blockchain is among the core technologies the country hopes to strengthen and doctor. Same time other priority areas include artificial intelligence, big data, and augmented and virtual reality.
The Finance Ministry has already created a research group concentrated on studying crypto-related regulations in May this year. The latest proposal from the Vietnamese PM comes as it the country seeks to catch up with its peers in CBDC developments.
Vietnam, the Southeast Asian country, is politically and geographically surrounded by nations that are far ahead in developing digital currencies. The PBoC (People’s Bank of China) has the most advanced project so far, with various domestic trials initiated and a plan to test the digital yuan (e-CNY) in cross-border transactions with Hong Kong. Cambodia and Thailand, along with Singapore, are already in the lead.
Le Dat Chi, deputy head of the Finance Faculty at the University of Economics, thinks the crypto research should be expedited to allow Vietnam to develop in the global race in the field of digital currencies.
Moreover, Huynh Phuoc Nghia, deputy director of the Institute of Innovation, stated recognition of digital currencies by the central bank would assist the government in evaluating the benefits and drawbacks while developing an appropriate management mechanism to help accelerate the process.
Earlier, the Asian country had stated that cryptocurrencies are not legally recognized in the country. According to a statement, the SBV announced that cryptocurrencies are not a lawful means of payment. The issuance, supply, bitcoin, and other similar virtual currency as a means of payment is prohibited.
Back in October 30, 2017, the State Bank of Vietnam, said: “As from January 1, 2018, the act of issuing, providing and using illegal means of payment (including bitcoin and other similar virtual currency) may be subject to prosecution.”
In the past, the national bank claimed that activities associated with digital assets could increase the risk of money laundering, terrorism financing, and tax evasion.