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Vietnam Bans Bitcoin Payments

Vietnam has become the latest jurisdiction to take a hardline approach to cryptocurrency transactions, announcing a ban on bitcoin payments effective from January 2018.

In an announcement made by the State Bank of Vietnam, the country’s central bank, cryptocurrencies would be deemed no longer to be a “lawful means of payment,” and the use of cryptocurrencies like bitcoin as a means of payment would be illegal.

Unlawful use of cryptocurrencies is to attract fines of $6,600 to $8,800 in Vietnamese dong as of the first of January, according to the statement.

“As from January 1, 2018, the act of issuing, providing and using illegal means of payment (including bitcoin and other similar virtual currency) may be subject to prosecution ... the issuance, supply, use of bitcoin and other similar virtual currency as a means of payment is prohibited.”

The news has come as a surprise to stakeholders in the domestic cryptocurrency space, where many had hoped reforms to legal structures around cryptocurrencies could see the likes of bitcoin formally recognized as a currency. Some had even expected this to be rolled out as early as 2018.

However, Vietnamese authorities have previously issued warnings about the use of cryptocurrencies, as well as intervening in the provision of digital currency services in the country.

The announcement will certainly come as a blow for companies and institutions in Vietnam that previously supported bitcoin payments, including FTP University, which recently initiated a bitcoin payment option for students paying tuition costs.

The university was addressed specifically by representatives from the central bank, who announced that continuing to accept bitcoin payments would be “committing an act of violation under the current law provisions, and may subject the university to the appropriate sanction.”

The news comes at a time of increasing efforts worldwide to regulate bitcoin, and the wider cryptocurrency industries. With most governments and central banks so far stopping short of outright bans, Vietnam becomes the latest to take a more stringent approach.

China was the first jurisdiction to clamp down on digital currency exchanges, and the mood from Russia points to a similarly restricted legal position.

However, some cryptocurrency analysts continue to question the wisdom and capability of government and central bank attempts to restrict the space, given the decentralized, global nature of the blockchain.

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