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Bitcoin Regulation and Bitcoin Tax in Vietnam
The State Bank of Vietnam in Hanoi issues the statements on financial regulations in Vietnam and has decreed that bitcoin is not a legal currency in Vietnam and is, in fact, an illegal payment method. This means anyone caught issuing, supplying and receiving bitcoin can be fined anywhere between 6000 and 9000 dollars in local currency (Won).
“As of January 1, 2018, the act of issuing, using, or using illegal means of payment (including Bitcoin and other similar virtual currency) may be subject to prosecution.” According to a statement issued by the bank.
This comes direct from the Vietnamese Prime Minister Nguyen Xuan Phuc, who last year asked for a legal framework to be developed to control cryptocurrency in Vietnam. This knee jerk reaction seems to be following in the footsteps of China, South Korea and Indonesia where the governments of those nations fear financial disruption to the status quo from the advent of and increase activity in bitcoin and other crypto currencies.
To illustrate this, the Bank Indonesia Governor Agus Martowardojo said that Bitcoin is not a valid form of payment in the country and users of the cryptocurrency “would be dealt with.” And China is out to curb cryptocurrency exchanges and new services.
Not all nations are fearful of crypto currencies however. Singapore welcomes bitcoin with open arms and in Japan it has been established as a legal currency along with the Yen. Not All banks are against crypto currencies either. In Switzerland the Swiss private banking group Falcon Private Bank are establishing guidelines and regulations for consumers to trade Ether (ETH), Litecoin (LTC), Bitcoin (BTC), and Bitcoin Cash (BCH).
The State Bank of Vietnam’s crack down however does not seem to affect mining or the use of blockchain technology. Traders can still operate provided the proceeds are not used as a currency unless that currency is transformed into the traditional Won currency first.
This also means that FTP University in Hanoi, which had allowed students to pay for tuition in bitcoin, now have to reverse that decision. A Bank Representative stated that, “if the university continued to treat bitcoin as a “legal means of payment,” it would be “committing an act of violation under the current law provisions, and may subject the university to the appropriate sanction.”
When the prime minister requested the framework to be drawn up in August last year (2017) it was hoped this would mean recognition of bitcoin as a currency and just a few light regulations would be proposed. So it has come as a shock to many across the board although there is some thought that this is a knee jerk reaction as a result of uncertainty over how crypto currency is affecting the financial market.
Needless to say it is likely that Vietnam residents will find other ways to buy and sell bitcoin through peer to peer networks and off shore accounts.
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