Vietnam Internet Crackdown Damages Plans to Become Blockchain Hub

Vietnam legislators approved a cybersecurity bill on June 12 putting tighter rules on tech companies from the start of 2019. Vietnam has been recognised as a potential hub for blockchain activity but doubts still remain over regulatory uncertainty.

The new bill requires tech companies to hold important personal data locally which means they will need to have a physical presence in the country. It also makes sweeping bans over using the internet in ways that may undermine the state or spread incorrect information.

Lieutenant-general Hoang Phuoc Thuan, director of the ministry’s Cybersecurity Department, had spoken to major tech companies including Facebook in the run-up to the bill being passed.

He told VnExpress:

“They said that this [law] was appropriate and that they will research to modify their companies’ strategies accordingly,” and added, “Providing customers’ data to security authorities is not a violation of privacy.”

The cybersecurity bill was approved by 91% of attending legislators in the National Assembly but had raised concerns by MPs that it would lead to a violation of international commitments. It was also criticized on the basis that it would damage the right to free speech by restricting online content.

Clare Algar, Amnesty’s director of global operations, said:

“With the sweeping powers it grants the government to monitor online activity, this vote means there is now no safe place left in Vietnam for people to speak freely. This law can only work if tech companies cooperate with government demands to hand over private data. These companies must not be party to human rights abuses, and we urge them to use the considerable power they have at their disposal to challenge Viet Nam’s government on this regressive legislation.”

The Asia Internet Coalition (AIC) also said that the new bill is likely to restrict the growth of Vietnam’s digital economy. They highlighted the additional costs of placing data centers within the country.

NewsBTC has previously reported about how Vietnam can become a hub for blockchain services even though virtual currencies are effectively banned there. Nicole Nguyen, head of corporate marketing at Vietnam’s Infinity Blockchain Labs, has argued that the high numbers of unbanked citizens and the low numbers of those who have bank accounts is a problem blockchain can solve.

Infinity Blockchain Labs also hosted a Blockchain Week Conference to discuss ‘Vietnam’s future in the global blockchain ecosystem’ which attracted 2,000 people. It also looked at the use of blockchain in giving legal protection to rural farmers and its use in tracking supply chains.

However, even though the tech leaders are working to create a more positive environment for new technologies, digital currencies are essentially banned. Those found breaking the law by using digital currencies can be fined up to 200 million Dong (about $9,000 US). It appears evident then that the Southeast Asian nation has taken a large leap backwards in terms of internet freedom leading to smaller shuffles backwards for blockchain innovation and crypto acceptance.

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