Cryptocurrency under the laws of Vietnam (Part 1)
In this Article, we will help foreign companies wishing to do cryptocurrency business in Vietnam to understand legal aspects on this type of business under the applicable laws of Vietnam.
The first part of the Article will answer the question: “Are cryptocurrencies recognized as non-cash payment instrument under Vietnamese laws?”
To answer the above question, we have to review, among others, the following key legal documents:
a. Civil Code No. No. 91/2015/QH13 issued by the National Assembly of the Socialist Republic of Vietnam dated 24th November 2015 (“Civil Code 2015”);
b. Criminal Code No. 100/2015/QH13 issued by the National Assembly of the Socialist Republic of Vietnam dated 27th November 2016 (“Criminal Code 2015”);
c. Law on Credit Institutions No. 47/2010/QH12 issued by the National Assembly of the Socialist Republic of Vietnam dated 16th Jun 2010 (“Law on Credit Institutions 2010”);
d. Law No.17/2017/QH14 issued by the National Assembly of the Socialist Republic of Vietnam dated 20th November 2017 on amendments to the Law on Credit Institution (“Law on Credit Institutions 2017”);
e. Law on Enterprises No. 68/2014/QH2013 issued by the National Assembly of the Socialist Republic of Vietnam dated 26th November 2014 (“Law on Enterprises 2014“);
f. Law on the State Bank of Vietnam No. 46/2010/QH12 issued by the National Assembly of the Socialist Republic of Vietnam 16th dated June 2010 (“Law on the State Bank of Vietnam 2010”)
g. Decree Non- Cash Payments No. 101/2012/ND-CP issued by the government of Socialist Republic of Vietnam dated 22nd November 2012 (“Decree No. 101/2012/ND-CP”);
h. Decree on amendments to Government’s decree No 101/2012/ND-CP dated November 22; 2012 on Non-Cash Payments No. 80/2016/ND-CP issued by the Government of the Socialist Republic of Vietnam dated 01st July 2016 (“Decree No 101/2012/ND-CP”); and
i. Decree Penalties for Administrative Violations on Monetary and Banking Sector No. 88/2019/ND-CP issued by the Government of the National Assembly Republic of Vietnam dated 14th November 2019 (“Decree No. 88/2019/ND-CP”).
Cryptocurrencies first appeared in Vietnam in 2013 and are known as a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems. Common virtual cryptocurrency includes Bitcoin, Ethereum, Litecoin, Ripple, IOTA, etc;
Vietnam has not yet provided any legal framework to regulate cryptocurrencies given the fact that controlling this kind of currency is extremely difficult.
Under the Civil Code 2015, cryptocurrencies are neither property nor payment instruments. In particular, Article 105 of the Civil Code 2015 provides as below:
“Article 105. Property
1. Property comprises objects, money, valuable papers and property rights.
2. Property includes immovable property and movable property. Immovable property and movable property may be existing property or off-plan property”
Clause 6, Article 1, Decree No. 80/2016/ND-CP on non-cash payment further provides that: “6. Non-cash payment instruments in payment transactions (hereinafter referred to as payment instruments), including: cheques, payment orders, collection orders, bank cards and other payment instruments as prescribed by the State Bank”. However, up to now, the State Bank of Vietnam has not yet defined the so-called “other payment instruments”. As a result, only cheques, payment orders, collection orders, bank cards or any other payment instruments which are named/ defined by the State Bank of Vietnam are payment instruments. Since cryptocurrencies have never been named/ defined as the payment instrument by the State Bank of Vietnam, they are not legally considered as non-cash payment instrument under the Vietnamese laws.
In the second part, we will answer the question: “Is usage of cryptocurrencies as a payment method for transaction purposes prohibited under Vietnamese laws?”
The first part of the Article will answer the question: “Are cryptocurrencies recognized as non-cash payment instrument under Vietnamese laws?”
To answer the above question, we have to review, among others, the following key legal documents:
a. Civil Code No. No. 91/2015/QH13 issued by the National Assembly of the Socialist Republic of Vietnam dated 24th November 2015 (“Civil Code 2015”);
b. Criminal Code No. 100/2015/QH13 issued by the National Assembly of the Socialist Republic of Vietnam dated 27th November 2016 (“Criminal Code 2015”);
c. Law on Credit Institutions No. 47/2010/QH12 issued by the National Assembly of the Socialist Republic of Vietnam dated 16th Jun 2010 (“Law on Credit Institutions 2010”);
d. Law No.17/2017/QH14 issued by the National Assembly of the Socialist Republic of Vietnam dated 20th November 2017 on amendments to the Law on Credit Institution (“Law on Credit Institutions 2017”);
e. Law on Enterprises No. 68/2014/QH2013 issued by the National Assembly of the Socialist Republic of Vietnam dated 26th November 2014 (“Law on Enterprises 2014“);
f. Law on the State Bank of Vietnam No. 46/2010/QH12 issued by the National Assembly of the Socialist Republic of Vietnam 16th dated June 2010 (“Law on the State Bank of Vietnam 2010”)
g. Decree Non- Cash Payments No. 101/2012/ND-CP issued by the government of Socialist Republic of Vietnam dated 22nd November 2012 (“Decree No. 101/2012/ND-CP”);
h. Decree on amendments to Government’s decree No 101/2012/ND-CP dated November 22; 2012 on Non-Cash Payments No. 80/2016/ND-CP issued by the Government of the Socialist Republic of Vietnam dated 01st July 2016 (“Decree No 101/2012/ND-CP”); and
i. Decree Penalties for Administrative Violations on Monetary and Banking Sector No. 88/2019/ND-CP issued by the Government of the National Assembly Republic of Vietnam dated 14th November 2019 (“Decree No. 88/2019/ND-CP”).
Cryptocurrencies first appeared in Vietnam in 2013 and are known as a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems. Common virtual cryptocurrency includes Bitcoin, Ethereum, Litecoin, Ripple, IOTA, etc;
Vietnam has not yet provided any legal framework to regulate cryptocurrencies given the fact that controlling this kind of currency is extremely difficult.
Under the Civil Code 2015, cryptocurrencies are neither property nor payment instruments. In particular, Article 105 of the Civil Code 2015 provides as below:
“Article 105. Property
1. Property comprises objects, money, valuable papers and property rights.
2. Property includes immovable property and movable property. Immovable property and movable property may be existing property or off-plan property”
Clause 6, Article 1, Decree No. 80/2016/ND-CP on non-cash payment further provides that: “6. Non-cash payment instruments in payment transactions (hereinafter referred to as payment instruments), including: cheques, payment orders, collection orders, bank cards and other payment instruments as prescribed by the State Bank”. However, up to now, the State Bank of Vietnam has not yet defined the so-called “other payment instruments”. As a result, only cheques, payment orders, collection orders, bank cards or any other payment instruments which are named/ defined by the State Bank of Vietnam are payment instruments. Since cryptocurrencies have never been named/ defined as the payment instrument by the State Bank of Vietnam, they are not legally considered as non-cash payment instrument under the Vietnamese laws.
In the second part, we will answer the question: “Is usage of cryptocurrencies as a payment method for transaction purposes prohibited under Vietnamese laws?”
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