Vietnam’s mining scene is on the rise. But what does the Vietnamese central bank actually think about cryptocurrencies?
After a less than stellar start to the year for Bitcoin miners, things are looking a little better with each passing month towards the end of the summer. That’s because the industry has not only recovered from the China shock. It’s also that the sore spot created by Elon Musk’s criticism of power-hungry Bitcoin mining is seemingly becoming more and more a relic of the past.
On September 6, for example, VN Express International, which claims to be Vietnam’s most widely read online newspaper, reported on the mining industry in Vietnam. In the article, the magazine profiled Quang Thuan, among others. The latter owns a chain of shops selling mining equipment to digital gold prospectors in Ho Chi Minh City. He reports that business is booming. Sales in early September, for example, were up more than 300 percent from the previous month, he said.
Bitcoin and the Vietnamese central bank.
Meanwhile, Vietnam’s central bank, State Bank of Vietnam, is not exactly overly crypto-friendly. It’s a global pattern, as what central bank is already completely crypto-friendly? Still, even a powerful central bank has to go with the times. For example, the Vietnam Briefing newspaper reported that Vietnam’s Ministry of Finance had already set up its own research group on cryptocurrencies on March 30. The ultimate goal of this organization is to create a legal framework for Bitcoin and Co. Further, the Vietnamese prime minister has asked the central bank to launch a pilot project on cryptocurrencies. This is expected to run from 2021 to 2023.
According to the report, one million Vietnamese:in are already using cryptocurrencies this year. Forecasts even predict that this number will increase thirty-fold by 2030. Which would not only make the market around cryptocurrencies – bitcoin exchanges, hardware manufacturers and tax revenue – more profitable. It would also mean that nearly a third of Vietnam’s population would be using cryptocurrencies by 2030.
However, this fact and the fact that cryptocurrencies are already used by one million Vietnamese:in puts the Central Bank of Vietnam in a quandary. If it is actually positioned rather 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 provide a regulated legal environment for Bitcoin and Co.
Bitcoin is currently in a kind of grey area in Vietnam from a legal perspective – cryptocurrencies are neither considered to be freedoms nor to be traded.mdcurrencies, nor defined as assets. So, similar to Russia, only holding and investing in cryptocurrencies is allowed. Actually, the word “allowed” does not fit, rather it is “tolerated”. But that’s all it is. According to the “Vietnam Briefing”, the use of cryptocurrency can be regulated with up to 8,700 US dollars in fines and also imprisonment.
Mining industry on the rise
While Bitcoin is in a thunderous upward vortex and crypto investors are sealing new price highs, the rising prices are also pulling the crypto mining scene up with it. Recently, Bitcoin cracked the psychologically important $50,000 mark again and is trading at $51,414 at the time of writing. So less than a 100 percent soaring away from the $100,000 price predicted by the stock-to-flow model.
If the mining industry was shaking earlier this year because of the Chinese mining ban, things are better today. Miners were forced to find new ways after the ban – new solutions were needed. And a few months later we can state: The mining industry found new ways and solutions. Even after Vietnam.