Vietnamese Prime Minister Pham Minh Chinh has asked the country’s central bank to conduct a study on cryptocurrencies and pilot the implementation of a blockchain-based currency within the next 2 years.

The Prime Minister of Vietnam asks the central bank to pilot a digital currency – cryptocurrency is highlighted in the prime minister’s decision

Cryptocurrencies were among the highlights of the Vietnamese Prime Minister’s recent decision to set up a digital government. “Blockchain-based cryptocurrency is one of the core technologies Vietnam hopes to develop and master,” Vietnam Plus said in a report. The English-language newspaper explained that other focal points are artificial intelligence, big data, virtual and augmented reality.

However, before mastering cryptocurrencies, the Vietnamese government must apply specific definitions for digital currencies and virtual assets as well as comprehensively regulate the cryptocurrency space. In April last year, the Ministry of Finance set up a working group to deal with the issue and propose management strategies.

The State Bank of Vietnam (SBV) previously warned that cryptocurrencies like Bitcoin are neither legally recognized nor used as a means of payment in the country.

The central bank previously ordered financial institutions not to treat cryptocurrencies as currency, and the regulator has not yet licensed any coin trading platforms.

According to Huynh Phuoc Nghia, deputy director of the Innovation Institute of Ho Chi Minh City University of Economics, it is time for the Hanoi government to research and implement a pilot digital currency. Academics emphasize:

“Cryptocurrency is an inevitable trend. The pilot implementation will help law enforcement agencies identify both positive and negative aspects and develop a “more appropriate regulatory mechanism”.

According to him, the recognition of digital currencies by the SBV will facilitate this process.

The Vietnamese Prime Minister calls on the central bank to pilot a digital currency – Vietnam is catching up with other countries in the race for digital currencies

Le Dat Chi, deputy dean of the Faculty of Finance at Ho Chi Minh University of Economics, believes that research should be accelerated so that Vietnam can advance in the global race for digital currencies. According to a survey he cited, central banks around the world are at different stages of this effort. More than 60 institutes are already testing the use of digital currencies, others are planning a pilot implementation, while a third group of banks is currently observing the development. Vietnam now wants to move on to phase two.

Traditional currencies such as the US dollar, euro and Japanese yen have a greater impact on the global basket of currencies and international trade than other fiat currencies, Vietnam Plus noted. But in the race to develop and deploy new technologies, countries like Vietnam have the opportunity to increase their influence on the global financial system, the publication said.

Central banks working on projects to issue central bank digital currencies (CBDCs) include China, Russia, the United States, and the euro zone. People’s Bank of China has its most advanced project yet, with further domestic testing underway, and plans to test the digital yuan (e-CNY) in cross-border transactions with Hong Kong.

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