Vietnam is one of a number of countries who have recently announced they’re looking at authorising Bitcoin as a form of payment and therefore further legitimising this cryptocurrency.
Both South Africa and Australia hit the headlines this week as they shared similar stories on this road for governments to classify and understand how to begin to regulate Bitcoin.
There is a nefarious side to users of the blockchain and who transact in Bitcoin which is widely publicised. However, this technology and Bitcoin’s growing global recognition which shows it as becoming the first truly global currency, has tremendous positive opportunities for trade. Part of the value of Bitcoin is that it is beyond the clutches of corrupt governments – but the fact that it is unregulated also has obvious dangers.
So what are the reasons for authorising a legal framework?
If you look at Vietnam’s recent economic history there was a major shift in 1986 with the Doi Moi reforms. Vietnam made the shift from a centrally planned to a market economy which transformed the country from one of the poorest in the world into a lower middle-income country.
Vietnam joined the World Trade Organization in 2007 and just last year the U.S. lifted the long-standing arms embargo against Vietnam.
All of which has helped move Vietnam to being one of the most dynamic emerging countries in East Asia.
Although very recently private business has also started to grow, the Vietnamese government still continues to hold a tight reign over major state sectors, such as the banking system, state-owned enterprises and foreign trade.
Bitcoin is transacted online and as an authorised payment form, the Vietnamese government would be able to benefit from revenue currently lost through tax evasion and open up further non-cash payment options for its booming online industry. The country expects revenue from online retail to hit $10 billion by 2020, accounting for 5% of total nationwide revenue from sales of goods and services, according to the government’s e-commerce development plan for 2016-2020.
Vietnam attracts a lot of foreign investment and opening up payments through a global currency will continue to demonstrate this attractiveness to foreign investment. China is an important trading ally (with some reports claiming China owns 90% of Bitcoin) and as such, widespread Bitcoin acceptance as a payment form could help the country continue its economic rise.
Government regulation will help to legitimise this cryptocurrency and counter money laundering activities, thereby helping more traditional industries feel secure in adopting it as a form of payment. The very nature of Bitcoin, that it’s decentralised, and no one owns it means it’s going to be difficult to regulate. Only time will tell, after all we did see the same headline in Dec 2016– that the Vietnamese government was looking to develop a legal framework for Bitcoin by end of 2017. (Source).