The Vietnamese government is expected to launch a digital currency regulatory framework next year, and the legalization of Bitcoin is the general trend

According to a Vietnamese media report, the Vietnamese government plans to establish a complete legal framework for virtual currencies such as Bitcoin.

There are many pyramid schemes in Vietnam, most of which involve the abuse of Bitcoin. Therefore, regulators and the government have warned people to be cautious in using digital currencies. Now, the Vietnamese government plans to introduce a corresponding legal framework for virtual currencies and property. They choose to regulate this innovation instead of banning it directly.

According to local media VnEconomy, the Vietnamese government has begun a comprehensive review of digital currencies, planning to eventually create "a comprehensive legal framework for virtual property, electronic money and virtual currencies" for the country.

The government has authorized its various departments to review the use and operation of virtual currencies and property in Vietnam. Ultimately, the Vietnamese central bank, the Ministry of Justice, the Ministry of Communications, the Ministry of Industry and Trade and other major institutions will jointly improve and launch this legal framework before December 2017.

Bitcoin Regulation

The specific regulatory model may be borrowed from governments and relevant agencies in other countries, including Japan, the United States and the European Union (EU). Japan passed a bill to regulate Bitcoin exchanges this year; while the regulatory approach varies from state to state in the United States, and New York's BitLicense is a typical representative of the country's existing legal system.

The Ministry of Justice said that although Bitcoin is not officially recognized in Vietnam, it is necessary to build a legal system for virtual currency. The market value of Bitcoin has exceeded 12 billion US dollars, so there are many cases involving it. Civil lawsuits and crimes arising from Bitcoin transactions fall under the jurisdiction of the Ministry of Justice, so it is important to improve the legal system.

Bitcoin taxation

The report pointed out that the Vietnamese government's comprehensive learning, understanding and supervision of Bitcoin will eventually lead to the taxation of cryptocurrency transactions or profits. It is reported that any tax evasion will be subject to criminal penalties, and the relevant taxation rules will be officially launched in 2018.

Vietnam is currently one of the fastest growing economies in the world, with a falling poverty line and increasing penetration of smartphones, which have introduced Bitcoin to many people who do not have bank accounts or who previously did not have access to computer technology.

Unfortunately, Vietnam’s economic development has also brought about illegal fundraising scams using digital currencies such as Bitcoin. For example, a pyramid scheme used Bitcoin to illegally raise funds, but failed after collecting $1.1 million; a pyramid scheme used Bitcoin to illegally earn $100,000, which eventually led to the government issuing a warning to remind the public to use cryptocurrencies with caution.

The Vietnamese government's plan shows that they have completely abandoned their previous prejudices and changed their position.

Meanwhile, after a sharp rise in bitcoin transactions in South Korea, the government is also studying the digital currency regulation methods of other countries. The South Korean government is expected to introduce specific regulatory plans for bitcoin exchanges and companies next year.