Bitcoin is not a currency, and using it as well as other virtual currency as a means of payment is not recognized and protected by law, the central bank said in a statement on Friday, citing current monetary and banking laws and regulations.
It also warned credit institutions and individuals not to “use, pay, invest, store, and make transactions using bitcoin and other virtual currency,” saying there are many potential risks in the cryptocurrency.
As all people involve in transactions using bitcoins are anonymous, the virtual currency could be misused as a tool for money laundering, drug trade, tax evasion, and illegal payments, the central bank said.
Some Vietnamese citizens have recently begun to invest in bitcoin by buying the currency via some exchanges.
Many other countries have either banned, restricted, or issued warnings against bitcoins, including Thailand, Russia, France, China, India, and Norway.
Bitcoins started circulating in 2009 as a form of electronic money independent of traditional banking and have become the most prominent of several fledgling digital currencies, according to Reuters.
The virtual currency relies on a network of computers that solve complex mathematical problems as part of a process that verifies and permanently records the details of every bitcoin transaction that is made.
Unlike traditional currencies, where a central bank decides how much money to print based on goals like controlling inflation, no central authority governs the supply of bitcoins.
Like other commodities and currencies, its value depends on people’s confidence in it.
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