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Press release on bitcoins and other virtual currencies
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Mass media has recently made repeated reports on bitcoins. By the initial study, it is understood that bitcoins is a type of digital currency (virtual currency), which is issued by neither government nor financial institution, but is created and operated by open source software in peer-to-peer technology.

 

Bitcoins started to be transacted on the Mt.Gox trading floor in June 2010 and it started to be utilized in 2013 in the form of payment, goods transactions and investment assets. The coming into being of bitcoins has brought about numerous risks for the users, in particular:

 

First, since bitcoins transactions are highly anonymous, bitcoins might become an instrument for such crimes as money laundering, narcotic trafficking, tax evasion, and transactions and payment of illegal assets.

 

Secondly, Bitcoins is a virtual currency kept in digital wallets, it therefore potentially risks assaulting, theft, data change or operational termination. In early 2014, the value of bitcoins was significantly down due to the fact that the two largest bitcoins trading floors in the world, namely Mt.Gox and MitStamp, temporarily terminated clients’ money withdrawal, because technical problem happened and the US authorities arrested 4 persons who were suspected to use bitcoins for criminal transactions. On February 25, 2014, the Mt.Gox trading floor unexpectedly closed down to make millions of US dollar of bitcoin network members become total losses.

 

Thirdly, Due to the volatility and complexity of bitcoins in a short period of time, investment in bitcoins risks the danger of bubble and potential losses for the investors.

 

Fourthly, bitcoins transactions are not regulated and controlled by any authorities, the bitcoins possessors will therefore bear all the risks due to the lack of protection of their interests.

 

Almost all the countries in the world have announced not to accept bitcoins as a form of legal payment and made the warning of risks for bitcoins users. Thailand, Russia, France, China, Malaysia, Indonesia, Norway…just to name a few do not accept bitcoins as a legal currency to be circulated in their markets.

 

In Vietnam, “mining” and investment in bitcoins has started to rise in recent time. The bitcoins possession by “mining” in Vietnam is very little, but mainly by buying it in certain exchanges.

 

In regard to utilization of bitcoins as a currency or form of payment, the State Bank of Vietnam wishes to state that according to the existing legal texts on money and banking, bitcoins (and other virtual currencies) is neither money nor legal form of payment in Vietnam. That is why, utilization of bitcoins (and other virtual currencies) as a form of payment is not lawfully approved and protected. Credit institutions are not allowed to use bitcoins (and other virtual currencies) as money or a form of payment in providing services to clients.

 

The possession, trading and utilization of bitcoins (and other virtual currencies) as a type of assets pose potential risks to people and are not lawfully protected. The SBV would therefore like to alert entities and individuals not to invest, possess and make transactions related to bitcoins and other virtual currencies.

 

PMH

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