Vietnam Set to Open First Online Bitcoin Trading Floor
HANOI – The Israeli Bitcoin exchange Bit2C announced this week that it will partner with Bitcoin Vietnam Co. Ltd. to open Vietnam’s first online Bitcoin trading floor, VBTC, before the end of April 2014.
Created in 2009, Bitcoins are a peer-to-peer virtual form of currency able to be bought or sold on online exchanges. While the value of a single Bitcoin is very volatile, the total value of Bitcoins worldwide is currently estimated at between US$7.5 and US$10 billion.
Despite a stern warning from the State Bank of Vietnam against participating in the trade of Bitcoin and other cryptocurrencies, Bit2C appears intent upon moving ahead with the establishment of VBTC, and has signed a contract to that effect.
In an official statement released earlier this month, the State Bank of Vietnam, the country’s central bank, stated that it does not support the trade of Bitcoins and that, because it is not currently recognized or protected by Vietnamese law, the virtual currency is functionally illegal:
- All the Bitcoin exchanges that allow users to trade anonymously, and therefore can be used to clean dirty money, sell drugs, hide from taxation, exchange and pay for illegal activities.
- Services that host Bitcoin have been shown to have the high potential to be hacked, stolen, or have the database exchanges, or the exchanges stopped. Actually, in the beginning of 2014 the value of Bitcoin significantly decreased when two of the biggest Bitcoin exchanges in the world, Mt. Gox and BitStamp temporarily did not allow such customers to pull out their money due to technical difficulties. The US government also caught four suspects for illegal activities connecting to Bitcoin. On February 25, Bitcoin exchange Mt. Gox suddenly closed with hundreds of millions of US dollars worth of Bitcoins being stolen.
- Due to the fluctuating nature of Bitcoin and the complications that can occur in a short time, Bitcoin is therefore a bubble and is unpredictable and dangerous for investors.
- Bitcoin is not regulated by any institution or country worldwide, therefore users of Bitcoin will not be protected and will have to shoulder the burden themselves of damages [related] to the Bitcoin’s volatility.
Thus, the Central Bank of Vietnam has warned organizations and individuals not to invest in Bitcoins, keep Bitcoins, use services connected to Bitcoins, and other cryptocurrencies.
The central bank’s anti-Bitcoin stance adds Vietnam to the growing list of Asian countries including China, India and Indonesia that do not recognize Bitcoin as a viable currency, and actively discourage its use.
Bit2C Ltd., an Israeli startup founded in 2012, currently operates the largest Bitcoin exchange in Israel and is regulated by Israeli authorities. Bit2C enables traders to buy or sell Bitcoins for Israeli Shekels.
“Ever since our launch in 2012 we have been proud of our innovative and unique trading system. After more than a year of live operation we have seen that this strong foundation has earned us the public trust and made us the largest trading community for Bitcoin in Israel. We believe Bitcoin represents a revolution in International trade and commerce and are very excited to see our technology playing a role in promoting the adoption of Bitcoin. Especially in the vibrant and fast-growing Vietnamese economy,” Eli Bejeranco, CEO of Bit2C Ltd., said of Bit2C’s partnership with Vietnam Bitcoin Co. Ltd.
Bitcoin Vietnam Co. Ltd., a Vietnamese startup founded in late 2013, aims to bring the same high-tech, high-security technology utilized by Bit2C to the Vietnamese market. Currently, Bitcoin Vietnam enables users to buy and sell unlimited amounts of Bitcoins through its broker service.
“We strongly believe that our upcoming cooperation in regard of the launch of Vietnam’s first live trading Bitcoin exchange will set a milestone in the further development of Vietnam’s– on an international level, still small but quickly expanding – Bitcoin economy. Vietnam is aiming to become a technological hub in the region and we believe that a broad adoption of Bitcoin and its related technological advancements will play a key role in bringing Vietnam’s economic development to the next level,” Nguyen Tran Bao Phuong, CEO of Bitcoin Vietnam Co. Ltd. said.
Bitcoin Vietnam is reported to maintain close ties with other Bitcoin exchanges in Germany, Singapore and the United States, and has pledged to follow all Vietnamese rules and regulations regarding money laundering during the establishment and operation of the country’s first online trading floor.
Despite Bitcoin’s initially-slow takeoff in Vietnam, a number of cafes and other businesses around the country have begun accepting the virtual currency for payment.
In February 2014, a Hanoi-based electronics and mechanical engineering equipment company announced on its website that it would begin accepting Bitcoins. An online toy vendor shortly followed suit with a similar announcement in mid-March.
Shortly before the State Bank of Vietnam released its warning against the use of cryptocurrencies, a popular café in Hanoi hung a sign above its entrance that read “Bitcoin Accepted Here.”
Bitcoin Vietnam’s joint establishment of the VBTC with an Israeli company is yet another sign of rapidly advancing trade relations between the two countries, which have made significant progress in agriculture, healthcare and the sciences since the establishment of formal diplomatic relations in 1993.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam in addition to alliances in Indonesia, Malaysia, Philippines and Thailand as well as as well as liaison offices in Italy and the United States.
You can stay up to date with the latest business and investment trends across Vietnam by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.
A Guide to Understanding Vietnam’s VAT
In this issue of Vietnam Briefing, we clarify the entire VAT process by taking you through an introduction as to what VAT is, who and what is liable, and how to pay it properly. We first take you through the basics of VAT in Vietnam before taking you deeper into the topic. Additionally, we provide updates on the new changes to the VAT process and explain how they will impact your business. The magazine is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore until the end of April.
For business enquiries, please contact us as at Vietnam@dezshira.com
Hoang Thu Huyen
This issue of Vietnam Briefing aims to clarify the entire VAT, short for value-added tax, process by taking you through an introduction as to what VAT is, liabilities that come with it, and how to pay it properly.
In this podcast we will introduce the advantages and the procedures of establishing a representative office in Vietnam and the alternatives to the RO once its mission is finished.
Asia Briefing Magazine, March & April 2013 Issue: "Expanding Your China Business to India and Vietnam"
Christian Fleming, former Managing Editor at Asia Briefing, a Dezan Shira alumni, discusses the evolution of China’s economic growth model compared to Vietnam and India as alternatives in the region.