Financial Crime World

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Vietnam Takes Steps to Combat Money Laundering with Blockchain Technology

The Vietnamese government has taken a significant step forward in preventing money laundering by passing the Law on Prevention and Combating of Money Laundering, which comes into effect from March 3. The law aims to combat increasingly sophisticated and complex methods used by criminals to launder money.

Preventing Money Laundering through Cryptocurrency Transactions

The National Assembly passed the law, which includes measures to prevent money laundering through cryptocurrency transactions. According to Vice Chairman and General Secretary of the Vietnam Banking Association (VNBA) Nguyen Quoc Hung, credit institutions, businesses, and individuals are all interested in the issue of money laundering prevention.

The Role of Blockchain Technology

Blockchain technology has opened up new possibilities for financial transactions, but it also poses challenges in preventing money laundering. The global blockchain market is expected to reach a value of over $1.4 billion by 2030, with a compound annual growth rate (CAGR) of nearly 86% from 2022-2030.

However, only a few countries have issued legal regulations to prevent financial crimes using high technology and blockchain technology, such as the European Union’s Law on Financial Crimes Cryptographic Asset Field (MiCA). Vietnam is one of the countries that lacks specific legal framework for cryptocurrency and digital assets.

Recommendations from the Vietnam Blockchain Association

The Vietnam Blockchain Association recommends that financial institutions perform three tasks:

  • Building a digital asset transaction interface
  • Creating processes
  • Preparing human resources well

The association also emphasized the need for stronger regulations to prevent money laundering and online fraud, which has been showing signs of increasing recently.

Money Laundering through Cryptocurrency Transactions

In recent years, cryptocurrency transactions have been used for payment, but money laundering through these transactions cannot be ruled out. According to data from Chainalysis, the total value of cryptocurrency received by Vietnam in 2021 was nearly $10 billion, with illegal activities worth $2.2 billion.

Introducing Biometric Authentication

To prevent money laundering and online fraud, the State Bank of Vietnam (SBV) plans to introduce a limit regulation on mandatory biometric authentication when transferring money between banks, which could be set at VND 10 million ($430). This move aims to neutralize the practice of buying, selling, and leasing bank accounts.

Combating Money Laundering and Online Fraud

The government’s efforts to combat money laundering come amid concerns over the use of cryptocurrency for illegal activities such as terrorist financing and corruption. As the country moves forward with its plans to develop a more robust financial system, it is essential that regulators and financial institutions work together to prevent these crimes.

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