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Viet Nam central bank says digital currencies not legit

Saturday, March 1, 2014
Bitcoins and other virtual currencies are not recognised as legal tender in Viet Nam, the State Bank of Viet Nam (SBV) said on Thursday.
The announcement, released in an official statement, was made in the context of the apparent increasing interest in bitcoin investment activities in the country, even while incidents across the world raised concerns about the use of these digital currencies.

Bitcoins and other virtual currencies are not recognised as legal tender in Viet Nam, the State Bank of Viet Nam (SBV) said on Thursday.

Bitcoin prices slumped sharply at the beginning of this year as Mt.Gox and Bitstamp, the world's two largest exchanges for the bitcoin, suspended money withdrawals following technical problems. US authorities have arrested four figures suspected of using the currency for criminal transactions.

The sudden closure of the Tokyo-based Mt.Gox on Tuesday may cause a dead loss of millions of US dollars for bitcoin users.

"Credit institutions are not permitted to use bitcoins and similar virtual currencies when they provide services to customers," the SBV statement noted.

SBV pointed out that while unprotected by the law, the bitcoin could become an instrument for crimes such as money laundering, drug trafficking and tax evasion. It was also vulnerable to market fluctuations and cyber attacks.

Investors should avoid holding a currency that is neither supervised by domestic state management agencies nor legally accepted in many nations, including France, Russia, China, and Norway, as well as Thailand, Indonesia and Malaysia.

Japanese Vice Finance Minister Jiro Aichi told Reuters on Thursday that any regulation of the bitcoin should involve international co-operation to avoid loopholes.

Bitcoin is the currency of the Internet, using computer networking technologies for transactions without the supervision or intervention of governments or financial institutions. It began to be traded on Mt.Gox in June 2010 and is now used for both payments and investments, according to the central bank.

At current prices, the bitcoin market is worth about US$7 billion, according to Reuters. 
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