Seeds of Wisdom RV and Economics Updates Thursday Evening 7-18-24
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An Update on Vietnam’s Quest for Crypto Regulation
An article by Hudson Reporter dated April 21, 2024 titled: Vietnam’s Path to Crypto Regulation by 2025: A Governmental Necessity, gives an update on Vietnam's quest for Crypto Regulation.
The article states that Vietnam plans to develop a legal framework for cryptocurrency regulation by May 2025 to address ownership risks and prevent illegal activities such as money laundering
Key Takeaways from the article:
1. Cryptocurrencies are not banned in Vietnam but regulation is urgently needed.
2. The Finance Ministry has been tasked to draft a regulatory framework by May 2025.
3. Measures against misuse, like money laundering, are also being studied.
@ Newshounds News™
To learn more: Hudson Reporter
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DE-DOLLARIZATION CONTINUES TO BE THE THEME OF BRICS NATIONS
"All are trying to make themselves safe. Information leaked not long ago that in the environment when the United States and the whole collective West want to steal Russian money Saudi Arabia is thinking how to reduce dependence on the dollar. THE PROCESS OF DE-DOLLARIZATION IS UNDERWAY, IT CANNOT BE STOPPED, he said."
Quote from Russian Foreign Minister Sergey Lavrov
@ Newshounds News™
Read more: X
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Crypto Regulations in Vietnam 2024
The post Crypto Regulations in Vietnam 2024 appeared first on Coinpedia Fintech News
Vietnam, a socialist country in Southeast Asia, has a population of 99.46 million and covers 331 thousand square kilometers. It has developed a strong market economy with socialist influences, making it one of the fastest-growing economies in terms of GDP. This economic growth has attracted significant foreign investment.
Vietnamese Government on Cryptocurrencies
Cryptocurrency is not banned in Vietnam, but a legal framework is needed to ensure its proper development and mitigate risks, according to a representative from the Ministry of Justice. Cao Dang Vinh, Deputy Director of the Department of Economic and Civil Legislation, noted on April 12 that there are varying understandings of virtual assets, digital currencies, and cryptocurrencies, with different countries adopting diverse management approaches.
Cryptocurrency is not banned in Vietnam: Ministry Cao Dang Vinh noted global variations in cryptocurrency perspectives and the absence of specific regulations in Vietnam. Vietnam lacks a legal framework for cryptocurrencies, stressing the need for regulation.
Cryptocurrencies carry risks that can lead to appropriation or money laundering. Vietnam currently lacks regulations to manage their development, and cryptocurrency is not considered a legal asset. Vinh emphasized the need for a legal framework to prevent these risks and illegal activities. The Ministry of Finance will provide specific proposals, and the Ministry of Justice will offer detailed opinions accordingly.
In addition to this, the Vietnamese state authorities are working on the possible applications of blockchain technology in the country.
Blockchain for Vietnam’s Cashless Society
The deputy Prime Minister of Vietnam, Vuong Dinh Hue signed out a policy decision in 2017, setting out the government’s plan to reduce the cash transactions in the country to less than 10%. The State Bank of Vietnam also announced the development of $700 million cashless payment network in collaboration with South Korean payment service provider Alliex.
Another bank, Tien Phong Commercial Joint Stock Bank(TPBank) moving one step further in the use of blockchain technology, joined hands with Japan’s SBI Ripple Asia to develop Ripplenet blockchain-based global payment network for processing cross-border transactions.
Launch of the First Money Transfer Service between Japan and Vietnam that Utilize Distributed Ledger Technology (DLT). TPBank is the latest financial institution supported by SBI Ripple Asia to leverage Ripple
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Cryptocurrencies law
In Vietnam, cryptocurrencies were not considered legal means of payment but could be bought, held, and traded. The government continued to reevaluate its approach to the crypto space, with the central bank maintaining that cryptocurrencies were not legal tender.
Cryptocurrencies were categorized as assets or goods under the 2015 Civil Code and the Commercial Law of 2005. These laws defined property broadly to include objects, money, valuable papers, property rights, and movable property, including future assets, allowing cryptocurrencies to be traded within the country.
What led to look over the need of Regulations?
The government of Vietnam cites many official reasons for the need for regulations and ban them as a means of payment,
—The crypto industry has no government supervision and therefore prone to illegal activities.
—Cryptocurrencies lack customer protection as they are volatile in nature which leads to price instability, security concerns, and market manipulation.
—Cryptocurrencies are open to illegal activities such as tax evasion, money laundering, terrorist funding and hacking.
The cryptocurrencies might possess the capacity to destabilize existing financial systems which can affect the nation’s economy.
Regulatory RoadMap of Cryptocurrencies
Vietnam has made several efforts to regulate the country’s cryptocurrency space. On 21 August 2017, the Prime Minister, Nguyen Xuan Phuc approved a project to complete the legal framework for managing digital assets and their activities.
On April 11, 2018, a directive was issued to the relevant authorities to manage crypto transactions in order to analyse the negative impact on the nation’s economy. In the directive, Bitcoin and similar cryptocurrencies were banned for using them as a mode of payments for any goods or services. But the users were free to invest in Cryptocurrencies. Those who found guilty would be penalised with a fine up to VND 200 million ($ 9,000).
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In February 2019, The Ministry of Justice also filed a report that reviewed the current legislation on crypto-related business in the country. They proposed three different policies that the government could consider and start working on the policy selected by the government. They are:
1. Floating and lax Regulatory approach
2. Straightforward approach
3. Legislation of digital Assets transactions under specific conditions.
Recently on May 11 2020, the Vietnamese Finance Ministry has approved to establish a research group to review, analyse and develop various regulatory policies around crypto-assets. The research group would be comprised of nine members of the group of the following departments,
—General Department of Taxation
—National Institute of Finance
—General Department of Vietnam Customs
—Department of Banking and Financial Institutions of the State Bank of Vietnam
The research group would be led by the Vice-Chairman of State Securities Commission, Pham Hong Son.
Authorities in Vietnam to Establish Crypto Research Group to Evaluate Policy. On May 11, the Ministry of Finance in Vietnam said it will come up with a research group responsible for examining & making policy proposals about crypto and virtual assets
1. Taxation and Mining
2. Taxes on Cryptocurrencies
As you have already aware of the fact that, Bitcoin and other cryptocurrencies are not considered as legal tenders and are banned to use them as a mode of payment, the tax policies are also not framed yet. Cryptocurrency taxation in Vietnam remains uncertain due to the lack of a clear legal framework.
The tax authorities have lost a lawsuit against a local citizen who was been taxed on the Bitcoin earnings. As the cryptocurrencies are not considered as a legal asset under Vietnamese law, the court ruled the authorities that they have no right to tax him.
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Mining of Cryptocurrencies
The Cryptocurrencies remain illegal as of now and restricted with the use of payment methods and so the mining. It is also considered illegal The government has also has passed a law which bans the import of bitcoin mining equipment into Vietnam.
However, the Ministry of Industry and trade expressed displeasure towards the ban and also showed concern over the decline in the mining business. The ministry sent a proposal to the Prime Minister of Vietnam, called the Document 5964 / BTC – TCHQ, mentioning that the mining pieces of equipment are not listed in the banned list of import or unsafe list. Hence the import should be allowed which was accepted by the government.
12-04-2024: Vietnam Does Not Ban Cryptocurrency, Confirms Ministry of Justice
A Ministry of Justice representative clarified that while cryptocurrency isn’t banned in Vietnam, there’s a need for a legal framework to guide its development and mitigate risks. Cao Dang Vinh, Deputy Director of the Economic and Civil Legislation Department, noted varying global perspectives on virtual assets, digital currencies, and cryptocurrencies.
Concluding Note
The Vietnamese Government has now acquired a progressive approach towards regulating the cryptocurrencies and initiated various steps. The various other approaches, however, are still vague and lack clarity.
More laws and reforms are required to ascertain the secured flow of cryptocurrency transactions in the country so that no scams or fraud occur risking the investor’s funds. The future of the cryptocurrencies are more secure and reliable in the country when these regulatory frameworks are put in place.
Read more: Binance
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BASEL 3 AND GOLD REGULATIONS
"Basel III is a set of financial reforms developed by the Basel Committee on Banking Supervision. It introduces stricter capital requirements to increase the resilience of banks. The main focus is on improving the quality of capital, particularly Tier 1 capital, which is essential for absorbing losses."
The Significance of Gold in Basel III Regulations
"Gold’s role in Basel III significantly changes how banks handle this asset. With the new Basel III Bank Accords, gold is taking center stage again as an important asset for financial institutions. The most significant change is that Basel III regulations treat gold held in vaults as a zero-risk asset, a status previously reserved for cash. This change elevates gold’s importance in ensuring the stability and liquidity of banks."
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Impact on Liquidity and Stable Funding
"Gold significantly impacts banks’ liquidity. Under Basel III’s measures, banks must maintain a specific Liquidity Coverage Ratio (LCR) to ensure they have enough high-quality liquid assets to survive financial stress. Gold can be considered part of these High-Quality Liquid Assets (HQLA)"
"Basel III regulations make gold a more attractive asset for banks by allowing bullion held in vaults or on an allocated basis to be treated as cash with a 0% risk weight. "
"Basel III demands that financial institutions hold a higher proportion of physical gold, rather than trading in derivatives. This change increases financing costs and demands more robust liquidity buffers. Banks must now hold physical assets to meet liquidity requirements, pushing the preference for tangible gold. As a result, this regulation stabilizes the gold market by reducing reliance on paper gold and emphasizing the importance of physical gold holdings. This shift supports higher demand and potentially boosts the price and stability of gold in the long term."
"With Basel III, gold is now considered a High-Quality Liquid Asset (HQLA)"
@ Newshounds News™
Read more: Metals Edge
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BASEL 3 ENDGAME
"Many parts of Basel III are already in place worldwide, including the U.S. However, the final changes, called Basel III Endgame and agreed upon in 2017, have been delayed for years by the COVID-19 pandemic and banks calling for more time to adjust to and lobby against the new regulations."
"12 Deadlines have come and gone, with mid-2025 the latest date for when the rules are supposed to go into effect in the U.S., which means announcing them months earlier to provide regulators, banks, and other stakeholders the time needed to prepare to meet the new standards. Banks would start using the rules on July 1, 2025, with the goal of having them fully in place three years later."
What Affect Would Basel III Have on Small and Medium-Sized Banks?
"While Basel III primarily targets very large, internationally active banks, critics charge that its regulations would also affect small and medium-sized banks. "
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When Does Basel III Go Into Effect?
"Since the Basel III Endgame process began, bank requests for more time to digest and comment on the plans, COVID-19, and shifts in the post-pandemic economy have all pushed back the deadlines. As it stands now, the regulations should start taking effect July 1, 2025, followed by a three-year phase-in period to give banks time to transition to the new rules. While previous deadlines have come and gone, the commentary period is over, which offers U.S. federal regulators more room to maneuver in going ahead with implementation."
@ Newshounds News™
Read more: Investopedia
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Chainlink’s tokenization sandbox cuts trials to days instead of months
The sandbox could lead to more financial institutions adopting asset tokenization solutions.
Chainlink is ushering in a new turnkey solution for institutions looking to conduct tokenization trials in the latest development for the tokenization industry.
Chainlink has introduced its new Digital Assets Sandbox (DAS) for financial institutions, which aims to accelerate digital asset innovation.
DAS will enable financial institutions to quickly experiment with new revenue-generating opportunities, like bond tokenization, with improved time-to-market and greater overall efficiency.
According to Angela Walker, the global head of banking and capital markets at Chainlink Labs, the new sandbox was born due to institutional demand for secure digital asset experimentation environments.
@ Newshounds News™
Read more: Coin Telegraph
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