Prime Minister of Vietnam Urges the Country to Regulate Cryptocurrencies
- Vietnam does not recognize crypto as a form of payment.
- Unlike in the US, Vietnam does not impose a tax on crypto holdings, hence the surge in adoption.
- A Chainalysis report ranked Vietnam as the leading nation in terms of crypto adoption.
Crypto usage in Vietnam has significantly increased in recent months, and the country’s prime minister, Pham Minh Chinh, has demanded more recognition and regulation of digital assets. In a recent group discussion, Chinh noted that he was “impatient that virtual assets are not recognized, yet people continue to trade” them.
Chinh’s comments suggested that Vietnam’s government might regulate the crypto industry in a bid to curb its role in financial crimes. The prime minister was quoted as saying,
It is necessary to study appropriate sanctions, and assign the government to make detailed regulations.
Vietnamese residents use cryptocurrencies even though the country’s government does not recognize the likes of Bitcoin as a payment option. However, it permits tokens to exist as investments in what appears to be a legal limbo.
Vietnam’s impressive crypto adoption was captured in a September report by Chainalysis, which ranked the Asian country ahead of other nations in terms of crypto adoption in 2022 and 2021. The report noted that Vietnam had an “extremely high purchasing power and population-adjusted adoption across centralized, DeFi, and P2P cryptocurrency tools.”
Lawmakers in Vietnam have urged the government to clarify its stance on cryptocurrency and give it proper recognition. Despite the slow feedback from the government, locals continue to indulge themselves in the digital world. It appears that there are several reasons for the high rate of crypto adoption in Vietnam.
The lack of taxes is one of the many factors contributing to Vietnam’s high crypto adoption. In contrast to the United States and other key countries where cryptocurrency holdings are taxed, Vietnam has a rather relaxed approach and does not recognize crypto as a legal tender.
The country’s tax officials have expressed interest in taxing cryptocurrencies, but they do not have the jurisdiction to classify them as taxable assets. As a result, Vietnamese law says little about taxing crypto. In addition, locals in the Asian country see digital currencies as perfect financial tools due to the absence of crypto taxes.
The trade-off is that cryptocurrency users in Vietnam are not protected by Vietnamese law in the event of fraud or losses. However, the country’s financial regulatory bodies strive to develop detailed guidelines for the industry.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
