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According to reports, the State Bank of Vietnam will become the latest central bank to explore the feasibility and operability of central bank digital currencies (CBDC).
Unlike some other countries, its brief description is to try a digital currency that is clearly based on blockchain technology rather than a centralized protocol.
According to July 3 report The Prime Minister of Vietnam, Phạm Minh Chính, announced in the English-language daily newspaper “Vietnam News” that the initiative is part of its broader e-government development strategy. It is expected that the central bank will develop and implement the pilot work between 2021 and 2023.
Vietnamese politicians embrace blockchain technology In principle, it is different from their widespread hostility to the decentralized currency that popularizes the underlying protocol. The country banned Bitcoin (BTC) as a means of payment in 2018, While retaining the right of individuals and companies to make private investments in encryption.
Soon after the ban, instructions were issued to credit institutions to restrict the services provided to digital currency-related activities in order to reduce the risk of money laundering. Despite these two initiatives, a formal regulatory framework has not yet been developed for cryptocurrency exchanges operating in the country.
Since the spring of 2020, this hostile but relatively casual approach has begun to shift.In May of the same year, the Ministry of Finance of Vietnam agreed to set up a research team to be responsible for Research and make policy recommendations on cryptocurrencies And digital assets. The group includes the National Bank, as well as the country’s securities regulatory agency, the Ministry of Banking and Financial Institutions, and the General Administration of Customs of Vietnam.
Huỳnh Phước Nghĩa, deputy director of the Institute of Innovation at the University of Economics in Ho Chi Minh City (UEH), told reporters that as cashless payments in the country continue to increase, the National Bank’s recognition of digital currencies will help further accelerate this process. In Nghĩa’s view, “digital currency is an inevitable trend”, and conducting pilot trials will help the government evaluate the pros and cons of various methods and explore appropriate management mechanisms.
related: Vietnam’s Ministry of Education will record certification on the blockchain
Another interviewee, Lê Đạt Chí, deputy dean of UEH School of Finance, emphasized that as the momentum behind CBDC continues to grow, the country must act quickly to remain competitive.
Vietnam News argued that in a global system dominated by the US dollar, the issuance of CBDC may be useful to smaller countries, and to a lesser extent, the euro and the yen dominate. However, in addition to calling for speeding up the research and development of CBDC, Chí also emphasized the potential risks to the country’s financial and currency security. The representative of NextTech Group (a company group focusing on digital business in Southeast Asia) believes that it is necessary for Vietnam to determine the official definition of cryptocurrency.
Before the government established a research team in May 2020, Vietnamese police officials Urges citizens not to participate in crypto investment plansIn March of this year, the Ministry of Finance of Vietnam itself issued a warning to the public about the risks of cryptocurrency investment. Given that the industry is still unregulated in the country.
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