Ho Chi Minh, VIETNAM – The Vietnamese have always been an entrepreneurial lot. Even during the dark days of communism, plucky Vietnamese businesspeople have found ways to supply goods and services in a more or less open black market. From DVD players to Coca Cola, the Vietnamese have always shown a certain capitalist DNA. So it should have come as no surprise to authorities that when the Bitcoin train rolled into Vietnam, that Vietnamese, including fraudsters and outright con men would show up as well. But with Vietnam not having as long a track record with a market economy as some of its more capitalist neighbors, regulatory oversight (which is already challenging for existing sectors), simply could not cope with cryptocurrencies, something which even established democracies such as the United States struggle to grapple with. In the wake of thousands being swindled in cryptocurrency scams, Vietnam’s Finance Ministry has decided to order a complete ban on the import of cryptocurrency mining rigs. On Monday, VNExpress International reported that due to the difficulty of regulating cryptocurrencies, Vietnam’s Finance Ministry is moving for a complete ban on cryptocurrency mining rigs. The proposal, made on Monday night was, according to the Finance Ministry, due to these rigs being used to create new cryptocurrencies which were difficult to regulate.
Referring to the massive cryptocurrency fraud in the commercial capital Ho Chi Minh city in April, where 32,000 people lost just over US$650.7 million after investing in cryptocurrency mining company iFan and Pincoin, the Finance Ministry proposed a blanket ban on import of mining equipment.
Cryptocurrencies are illegal in Vietnam, with Prime Minister Nguyen Xuan Phuc calling for strict management of all activities involving the digital assets, after many companies started attracting investors through initial coin offerings (ICO). But the ban has not stopped enterprising Vietnamese from cashing in on the cryptocurrency craze in that country. If smugglers could get video tapes and western music in during the height of communism, they would certainly get cryptocurrency mining equipment in during these far more market-oriented times. According ot the Vietnam Finance Ministry, as of April this year, Vietnam had imported over 6,300 cryptocurrency mining rigs, with 4,300 going to Hanoi and 2000 going to Ho Chi Minh. Last year, over 9,300 cryptocurrency mining rigs landed on Vietnam’s shores. But the current ban on cryptocurrency mining rigs is not likely to change the Vietnamese appetite for the machines. According to one cryptocurrency miner, who spoke on condition of anonymity and whose comments have been translated into English,
“All this (the Finance Ministry) action will do, is drive up the prices of existing (cryptocurrency) mining rigs. The demand won’t change. It will force things even more underground.”
“We’ll start using graphics cards instead.”
In fact, many major cryptocurrencies such as Ethereum and Monero are looking to move away from Application-Specific Integrated Circuit (ASIC) cards to allow hobbyists or decentralized mining using standard Graphics Processing Units or GPUs, commonly found in gaming computers. Which means that ordinary computers can be converted into cryptocurrency mining rigs. The shift means that despite the Vietnamese Finance Ministry’s proposed cryptocurrency mining rig import ban, determined Vietnamese cryptocurrency miners can still mine other cryptocurrencies which do not require specialized equipment. The Vietnamese experience shows just how challenging regulation of cryptocurrencies as well as just how unprepared regulators are to deal with the nascent technology. According to the Vietnamese cryptocurrency miner,
“As long as there is demand, we will keep on mining (cryptocurrency).”
For now at least, it seems that demand in Vietnam shows no sign of petering out.