Prime Minister Pham Minh Chinh of Vietnam has instructed the country’s central bank, the State Bank of Vietnam (SBV), to conduct a study on cryptocurrencies and pilot the implementation of a blockchain-based digital currency within the next two years. This directive is part of Vietnam’s new e-government development strategy, aimed at accelerating digital transformation.
Crypto Highlighted in E-Government Strategy
According to local state media, the prime minister’s decision on building a digital government specifically highlights cryptocurrency. It notes that cryptocurrency based on blockchain is among the core technologies Vietnam hopes to develop and master, alongside other priorities such as artificial intelligence, big data, and augmented/virtual reality. However, before mastering crypto, Vietnam must adopt clear legal definitions for various types of digital currencies and virtual assets, and comprehensively regulate the crypto space.
The Ministry of Finance established a working group in April 2020 to study the matter and propose regulatory policies. Previously, the SBV had warned that cryptocurrencies like Bitcoin are not legally recognized in the country, nor can they be used as a means of payment. Financial institutions have been instructed not to treat crypto as currency, and no crypto trading platforms have been licensed so far.
Experts Urge Accelerated Pilot
Huynh Phuoc Nghia, deputy director of the Institute of Innovation at the University of Economics in Ho Chi Minh City, emphasized that it is time for the government to study and pilot digital currency. He stated: “Digital money is an inevitable trend.” The pilot will help authorities identify both positive and negative aspects and develop a more appropriate management mechanism. He added that recognition of digital currencies by the SBV would facilitate this process.
Le Dat Chi, deputy head of the university’s Finance Faculty, argued that the study should be accelerated to allow Vietnam to advance in the global digital currency race. Citing a survey, he noted that over 60 central banks worldwide are already piloting digital currencies, while others are planning pilots or still observing. Vietnam now aims to move from observation to the pilot stage.
Vietnam’s Opportunity in the Global CBDC Race
Traditional fiat currencies like the U.S. dollar, euro, and Japanese yen dominate global trade. However, as Vietnam Plus points out, nations like Vietnam can increase their influence on the global financial system by embracing new technologies. Among central banks actively developing central bank digital currencies (CBDCs) are those of China, Russia, the U.S., and the Eurozone. China’s digital yuan (e-CNY) project is the most advanced, with extensive domestic trials and plans for cross-border testing with Hong Kong.
This directive from the prime minister signals that Vietnam is keen to catch up in the fintech race. Whether the country will adopt crypto-friendly regulations and issue a blockchain-based sovereign digital currency within the next two years remains a key development to watch.