For over ten years now blockchain technologies have largely been focused on cryptocurrencies and attempts to raise the popularity of the underlying technology. In Vietnam, early incidents involving ponzi schemes and fraudulent investments led the bank of Vietnam to declare that cryptocurrency would not be accepted as legal tender in the country. They then went further and ordered banks to monitor and prevent accounts from purchasing cryptocurrency. While publicly stating continued support for the underlying blockchain technology we have only recently seen any attempts to regulate the same, primarily in the draft decree governing fintech sandbox.
But the government of Vietnam has found itself somewhat like an ostrich with its head in the sand. Vietnam has recently been ranked as the world’s leading adopter of cryptocurrency with more per capita adoption than either the USA or China. Part of this prize comes from the ease of stepping around state Bank orders by uploading fiat to e-wallets and then using the e-wallets to purchase crypto. The other part is that Vietnamese have long held a mistrust of banks and this, coupled with a very healthy risk attitude, has lead the adoption of crypto.
But what about other blockchain technologies? Axie Infinity and StepN have both garnered headlines in the country as Axie Infinity is the brain child of Vietnamese developers and StepN has led to a host of fraudulent imitators targeting Vietnamese cybercitizens. But the skies the limit as demonstrated thus last week by the presentation of Buidl Vietnam 2022 held in Ho Chi Minh City.
Thus conference brought together industry experts from across the world to discuss the future of blockchain and to make networking connections amongst the 500 plus attendees.
The conference was organized by KryptoSeoul and the recently formed KryptoVietnam.
And therein lies a tale . . .
An internet search of KryptoVietnam reveals that there is a minimal web presence for the organization. They do not seem to have a website and the majority of the information about them is published on their Facebook page.
I suspect there is a reason for this. As I noted already, cryptocurrency is prohibited to be used as payment and local banks are prohibited from processing cryptocurrency transactions. This means that, at the time, an organization like KryptoVietnam must walk a fine line between promotions of blockchain technologies and discussions of cryptocurrency that might be considered in violation of banking regulations.
By relying on Facebook as it’s online home it creates a buffer between the founders/operators and the government. Though in light of the recent decree guiding the cybersecurity law that buffer may be a small one.
Under that decree, foreign e-commerce players who provide services cross-border into Vietnam must not only pay taxes on their revenues derived from Vietnam, but they must also cooperate with the police if they want to avoid onerous requirements of storing all Vietnamese originating data in country. Many of the reasons available to the police to request such cooperation include violations of the law or promoting the same.
Now, KryptoVietnam may yet be too small to raise the hackles of the state prosecutors, it might just enter their sites depending on how cryptocurrency and blockchain develop in the country.
The process might look like this. 1. The department within the Ministry of Police responsible decides that the information posted about cryptocurrency is in violation of stated laws and thus warrants a further investigation. 2. They find something objectionable and contact Facebook to either ask that the poster change the information or remove it completely. 3. Facebook will have to decide whether to abide by the authority’s request. This decision is one that I see will resolve itself rather quickly. Facebook makes millions and millions of dollars from cross-border advertising in Vietnam. The ability of one small organization to post on their platform does not come close to their interest in avoiding the penalties of failing to cooperate. 4. Facebook removes the content and continue to operate without hindrance in the country, or 4b. Facebook refuses to cooperate and is required now to tore all Vietnamese data within the country and to open an office within the jurisdiction.
Facebook cares very little for such things, thus, they will likely cooperate 99% of the time. And as such KryptoVietnam would thus be required to seek out other options, though even those would be easily disallowed by an IP wall that would prevent access to such sites by any computers located in Vietnam. But then one gets into the role of virtual private networks and a winding rabbit hole of back and forth contests.
Whether or not Vietnam eventually adopts cryptocurrency, they are keen on the blockchain. How they intend to monitor it and regulate it many possible iterations remains to be seen. For now, let’s hope for more organizations like KryptoVietnam who continue to push the boundaries of technology while placing Vietnam number one in the world of blockchain.