Cryptocurrencies in Vietnam
Overcoming Stumbling Blocks
Vietnam has taken a flat-out cryptocurrency clamp down approach when it comes to cryptocurrencies and the business surrounding them. Rather than adopting a strict but transparent and empowering legislative stance, the nation remains wary. A July report by the country’s State Securities Commission (SSC) banned public companies, fund management companies, securities companies, as well as securities investment funds from participating in activities associated with cryptocurrencies.
This is no doubt due to recent cases of crypto-corruption. After becoming public, they kept tarnishing the reputation of a country seeking to rid itself of such a label. Last year, a crackdown on corruption rattled foreign investors, but it does appear to be taking hold – resulting in an improved business climate.
In total, 32,000 people reportedly fell victim to a recent schemeby Modern Tech, an ICO claiming to be the authorized Vietnamese representative for the launches of the iFan and Pincoin platforms. Victims shelled out more than 15 trillion Vietnamese dong ($658 million). Three months after the biggest racket in Vietnam’s cryptocurrency history, another instance of crypto-corruption occurred. Here more than 300 investors reported Le Minh Tam, director of Bitcoin mining startup Sky Mining, to Vietnamese authorities. There are suspicions that Tam absconded to the United States with $35 million in client money.
Emergence Down the Road
Cryptocurrencies arrived in Vietnam a few years ago when several merchants in Ho Chi Minh City began taking payment in Bitcoin. Soon after, Bitcoin ATMs began popping up in high-populated areas. Crypto enthusiasts could conveniently withdraw cash and buy the cryptocurrency. FPT, Vietnam’s biggest IT company, also considered a pilot program. This was to let students at its education arm pay their tuition in Bitcoin.
However, plans are on hold as the central bank has told investors and cryptocurrency users to wait. Meanwhile, similar coin-mining farms in Vietnam are still attracting investors with promises of high yields. Examples are Eco mining and Asama mining.
Like all Communist countries, Vietnam and its planned economy lost momentum for productivity and sustainable growth not long after the Cold War. Realizing this, finance ministers during the mid-1980s Doi Moi reform period shifted its economy from highly centralized to a mixed economy. The economy has experienced rapid growth over that period. Still, systemic corruption plagues its ability to attract investors and keep them.
On the bright side, a forecast made last year by PricewaterhouseCoopers predicted Vietnam to become the fastest-growing of the world’s economies. Figures project a potential annual GDP growth rate of about 5.1%. Such GDP would make its economy the 20th-largest in the world by 2050. Vietnam has also been named among the Next Eleven and CIVETS countries. The CIVETS are six favored emerging markets – Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. They are favored for having “a diverse and dynamic economy” and “a young, growing population”.
However, as the latest reports on a massive scam are causing new waves in the Vietnamese crypto community, the profound need for education and information in the world of blockchain are evident more than ever, in order to pave the path towards acceptance and mass adoption.