In a notice [PDF], dated 29 August, the Bank of Laos (BOL) said the public is warned against the use of “unregulated” cryptocurrencies, specifically naming Bitcoin, Ethereum and Litecoin as examples. Addressed to merchants, traders and residents, the notice also urged citizens to research and understand any digital assets. The notice warned against the purchase and sale, or trading of digital assets, talking up the risks in crypto-related investments.
According to the Laotian Times, the central bank pointed to the current Law on Payment Systems (last revised in November 2017) that refutes cryptocurrencies as payment instruments after claiming they do not meet the standards required for classification as a currency.
As things stand, there is no provision in Lao law to recognize cryptocurrencies nor are they regulated by any legislation in the country.
Still, businesses in the country ‘have already begun acceptance of payment for goods and services in cryptocurrencies’, the report added.
A senior central bank official sought to distinguish cryptocurrencies from fiat currencies, telling the Vientiane Times:
“It is not [a] real currency like Lao kip or Thai baht, because it is unable to pay debt. It is a digital record of a transaction. It is not yet regulated by law. People who get involved in the use of cryptocurrencies are taking risks if the digital system fails.”
Despite the public notice, which is intended to caution Lao citizens of risks in cryptocurrency investments, there is no explicit ban on cryptocurrency trading domestically.
Laos’ neighbor to the east, Vietnam, has taken a more hostile approach in regulating cryptocurrencies in recent times. In October 2017, Vietnam’s central bank issued a notice that effectively outlawed cryptocurrency payments in the country. Legislation toward that effect kicked in at the turn of 2018 wherein bitcoin adopters could stand to face fines up to $9,000 as well as criminal prosecution. Vietnam has also moved to suspend imports of cryptocurrency miners into the country.
Laos would do well to take a cue from Thailand, its other neighbor. Recognizing the potential of cryptocurrency markets and initial coin offering (ICO) fundraising, Thailand’s securities regulator published ICO regulations in July while notably approving seven cryptocurrencies for operators to receive payments in. They are: Bitcoin, Ethereum, Ripple, Bitcoin Cash, Ethereum Classic, Stellar and Litecoin.
As Thailand’s largest movie theater chain begins accepting cryptocurrencies as payments for seats and popcorn across 600 screens nationwide, the country’s securities firms are also exploring the possibility of establishing and operating a joint cryptocurrency exchange in Bangkok.
Laos banknote image from Shutterstock.