Vietnam’s mining scene is on the rise. But what does the Vietnamese central bank actually think of cryptocurrencies?
After the year had not started so well for Bitcoin miners, things are looking a little better with each month towards the end of summer. Because the industry has not only recovered from the China shock. The wound caused by Elon Musk’s criticism of the electricity-intensive Bitcoin mining is apparently more and more a relic of the past.
For example, VN Express International, which claims to be Vietnam’s most widely read online newspaper, reported on the mining industry in Vietnam on September 6th. In the article, the magazine portrayed Quang Thuan, among others. He owns a chain of stores that sells mining equipment to digital prospectors in Ho Chi Minh City. He reports on flourishing business. Sales at the beginning of September rose by over 300 percent compared to the previous month.
Bitcoin and the Vietnamese Central Bank
Meanwhile, the Vietnamese central bank State Bank of Vietnam is not exactly overly crypto-friendly. A global pattern, because which central bank is already completely crypto-friendly? Nevertheless, even a powerful central bank has to keep up with the times. The newspaper “Vietnam Briefing” reported that the Vietnamese Ministry of Finance set up its own research group on the subject of cryptocurrencies on March 30th. The goal of this organization is ultimately to create a legal framework for Bitcoin and Co. The Vietnamese Prime Minister has also asked the central bank to start a pilot project on the subject of cryptocurrencies. This should expire in the period 2021 to 2023.
According to the report, one million Vietnamese are already using cryptocurrencies this year. Forecasts even assume that this number will increase thirty-fold by 2030. Which wouldn’t just make the market for cryptocurrencies – bitcoin exchanges, hardware manufacturers, and tax revenues – more profitable. It would also mean that almost a third of the Vietnamese population would use cryptocurrencies by 2030.
However, this fact and the fact that cryptocurrencies are already being used by a million Vietnamese people puts the Central Bank of Vietnam in a bind. If it is actually positioned contrary to Bitcoin, it has to admit: The Vietnamese population does not entirely share this opinion. So the Vietnamese central bank has to find ways to offer a regulated legal environment for Bitcoin and Co.
Bitcoin is currently in a kind of gray area in Vietnam from a legal perspective – cryptocurrencies are neither defined as foreign currencies nor as assets. Similar to Russia, only holding and investing in cryptocurrencies is allowed. Actually, the word “allowed” doesn’t fit, rather it is “tolerated”. But nothing more. According to the “Vietnam Briefing”, the use of the cryptocurrency can be regulated with up to 8,700 US dollars in fines and imprisonment.
Mining industry on the rise
While Bitcoin is in a thundering upward vortex and crypto investors are forging new highs, the rising prices are also pulling the crypto mining scene upwards. Bitcoin recently cracked the psychologically important mark of 50,000 US dollars again and is trading at 51,414 US dollars at the time of writing. In other words, less than a 100 percent soaring distance from the price of 100,000 US dollars forecast by the stock-to-flow model.
If the mining industry was shaking at the beginning of the year because of the Chinese mining ban, things are better for the industry today. After the ban, miners were forced to break new ground – new solutions were needed. And a few months later you can say: The mining industry found new ways and solutions. Even to Vietnam.