Vietnam's central bank has announced a ban on the use of cryptocurrencies such as Bitcoin as a payment method, and violators will be punished

Vietnam’s central bank is banning the use of Bitcoin and other cryptocurrencies for payments.

According to a statement released by the Central Bank of Vietnam on November 30, the central bank believes that cryptocurrencies are "not a legal means of payment" in the country and "prohibits the issuance, supply, and use of Bitcoin and other similar virtual currencies as a means of payment."

The statement also said that from next year, illegal use of cryptocurrencies for payments will be subject to fines of between VND15 million ($6,600) and VND20 million ($8,800).

The Central Bank of Vietnam stated:

“From January 1, 2018, the issuance, provision and use of illegal payment methods, including Bitcoin and other similar virtual currencies, may be subject to prosecution.”

The move is part of Prime Minister Nguyen Xuan Phuc’s push to establish a new legal framework for cryptocurrencies. The central bank said the work has now been completed and the new regulatory framework has been submitted to the government.

Local media said the ban may be having an impact on local institutions.

News outlet VietnamPlus says that FTP University in Hanoi, Vietnam, which previously announced that it would allow Bitcoin to be used to pay tuition fees, may now have to withdraw this decision. A representative of the State Bank of Vietnam said that if the university continues to consider Bitcoin as a "legal payment method," it will be an "illegal act under the current legal provisions and may be subject to appropriate sanctions."

The move by Vietnam’s central bank may shock many in the country’s cryptocurrency market. When the country’s prime minister called for a new regulatory framework for cryptocurrencies in August, some hoped that the country would officially recognize Bitcoin as a legal means of payment next year.

However, the Vietnamese government has previously issued warnings against Bitcoin and prevented credit institutions from providing digital currency services.