Banning virtual assets is not feasible, can Bitcoin be managed similarly to USD?

Total value of virtual assets expected to reach $16 trillion by 2030

Speaking at the workshop on contributing ideas to build a legal framework for virtual asset (VA) management by Vietnam Blockchain Association (VBA) held on March 13 in Hanoi , Mr. Nguyen Doan Hung, Vice President of VBA, former Vice President of the State Securities Commission, said that in 2023, the international Financial Action Task Force (FATF) put Vietnam on the enhanced monitoring list (also known as the gray list).

At the same time, FATF made 17 action recommendations for Vietnam to address shortcomings in the mechanism to prevent and combat money laundering, terrorist financing, and financing of proliferation of weapons of mass destruction.

Cấm tài sản ảo không khả thi, có thể quản lý Bitcoin tương tự USD?- Ảnh 1. — Overview of the workshop

"This is extremely dangerous because the country's reputation is affected. According to the International Monetary Fund (IMF), a country on the grey list can have a significant impact on its economy , directly affecting its GDP, which is very disadvantageous," said Mr. Hung.

Mr. Hung acknowledged that the recent request by the Government for the Ministry of Finance to take the lead in developing a legal framework to ban or regulate VA and virtual asset service providers (VASPs) and set a specific deadline of May 2025 is a very drastic action to restore Vietnam's reputation in the international community.

Referring to VA management, Mr. Phan Duc Trung, Permanent Vice President of VBA, emphasized: "VA is an irreversible general trend of the world. The total value of VA is expected to account for 10% of global GDP, reaching 16,000 billion USD by 2030.

"Banning VA is not feasible. We believe that it is necessary to quickly issue regulations to manage VA and VASP in accordance with FATF's anti-money laundering standards to remove Vietnam from the grey list," said Mr. Trung.

According to Mr. Hung, from the determination in the plan to reality is a long and challenging journey. Because admitting or not admitting, banning or adjusting VA all pose conflicts of interest between traditional investment and business groups such as real estate, stocks, bonds and those pursuing the digital economy such as blockchain, AI, IoT...

Dealing with virtual assets similar to USD?

A representative of Remitano, a VASP that has been present for more than 10 years, said that the unit hopes that the legal framework for VA in Vietnam can be completed soon following the general trend of the world.

"Completing the legal framework in the direction of creating positive conditions for VASPs to operate and develop will encourage foreign enterprises to invest in Vietnam, making Vietnam a technology destination in the region," said a representative of this unit.

With nearly 30 years of experience in the financial market, Mr. Do Ngoc Quynh, General Secretary of the Vietnam Bond Market Association, said that with the story of VA management, Vietnam currently "cannot be indifferent or avoid it, but must make a strategic choice".

"How to get the best national benefits while limiting negative impacts. If we make good use of capital and resources in society, it will certainly be very good for the economy," Mr. Quynh emphasized.

Although Mr. Quynh believes that the view of state management agencies in many countries on VA management is currently very positive, most governments are quite confused.

Governments must respond appropriately because otherwise it will directly impact the most important sovereignty, which is national monetary sovereignty. "That is something we must share with state management agencies," said Mr. Quynh.

With VA management, Vietnam cannot be indifferent or avoid it now, but must make strategic choices. How to get the best national benefits and limit negative impacts. If capital and resources are well utilized, this will be very good for the economy.

Mr. Do Ngoc Quynh, General Secretary of Vietnam Bond Market Association

Suggesting a policy for managing VA in the coming time, Mr. Quynh cited the story of USD management. "When the country first opened up, the national monetary policy was not to allow any foreign currency to be used for payment, to fight against dollarization.

However, Vietnam, which has just opened up and needs capital, has issued a policy allowing people to keep USD, deposit USD in banks, but not use USD to make payments in the economy. Thus, Vietnam considers USD as an asset. If we apply the same thing in Vietnam now to VA, specifically to Bitcoin... would that be okay?", Mr. Quynh asked a suggestive question.

On February 23, Deputy Prime Minister Le Minh Khai signed Decision No. 194/QD-TTg promulgating the National Action Plan to implement the Vietnamese Government's commitments on preventing and combating money laundering, terrorist financing and financing of proliferation of weapons of mass destruction in order to remove Vietnam from the FATF grey list.

The Ministry of Finance is assigned to coordinate with relevant ministries and branches to develop a legal framework to prohibit or regulate virtual assets and organizations providing virtual asset services; at the same time, demonstrate the enforcement of regulations including measures to ensure compliance.

The implementation deadline is May 2025.

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