Vietnam is the latest country to restrict the use of cryptocurrencies, as the communist country’s central bank decreed that virtual currencies will be prohibited as a method of payment starting next year.

The decree noted that the new policy, effective Jan. 1, was approved by the State Bank of Vietnam following the instructions of the Prime Minister. It said that “bitcoin and other similar virtual currency is not a legal means of payment in Vietnam” before adding that “the issuance, supply, use of bitcoin and other similar virtual currency as a means of payment is prohibited in Vietnam.” Those who breach the law will be subject to fines between VND150 million ($6,600) and 200 million ($8,800) and further prosecution under local law, suggesting that jail time is also a possibility as well.

For those who prefer their currencies to be state issued, the decree did note that other payment methods are legal, including “checks, payment orders, payment orders, collection orders, bank cards and other and other payment instruments as prescribed by the State Bank.”

Some are saying that this is a case of Vietnam outright banning the use of cryptocurrencies, but others are suggesting that the decree has been misunderstood. Dominik Weil, co-founder of Bitcoin Vietnam, said claims that cryptocurrencies have been banned are “fake” and that nothing has changed.

“In short: All status quo,” Weil wrote in a blog post. “You are not supposed to offer goods/services in other means than VND – same rules apply e.g. for USD/Gold etc.” Weil claimed that the announcement was made after to a Vietnamese university said it would start accepting bitcoin for tuition fees and that the decree is strictly limited to payments, not an outright ban on bitcoin and other cryptocurrencies. The status of cryptocurrency regulation in Vietnam remains “unchanged,” he added.

Whatever the level of the restrictions, Vietnam isn’t the first country to crack down on the use of cryptocurrencies and likely won’t be the last. China, Vietnam’s neighbor to the north, has been leading the charge having banned cryptocurrency exchanges in September after first banning initial coin offerings. Russia joined the list earlier this month in also banning cryptocurrency exchanges, citing the potential for cryptocurrencies to be used to launder funds acquired through criminal activities, tax evasion, terrorism financing and fraud schemes.

Photo: Duncan Riley