STATE BANK OF VIETNAM BANKING ACADEMY OF VIETNAM FACULTY OF FOREIGN LANGUAGE ---------- GRADUATION THESIS VIETNAMESE GDP IN THE PERIOD OF 2007 - 2016 Supervisor : Mr. Ngo Tung Anh (MA, MBA) Student : Pham Thi Huong Ly Class : K17ATCC Student code : 17A7510098 Ha Noi, May 2018 Banking Academy Graduation thesis DECLARATION I hereby certify that this material is entirely my own work and effort. It has not been applied for any degree or previously submitted anywhere for any award. I have exercised reasonable care to ensure that the thesis is original, and does not, to the best of my knowledge breach, any law of copyright, and has not been taken from the work of others save and to the extent that such work has been cited and acknowledged by means of complete references.
Banking Academy Graduation thesis ACKNOWLEDGEMENTS It is always a pleasure to remind the amazing teachers in the Banking Academy for their sincere guidance I received to uphold my pragmatic skills in English generally and in Banking and Finance particularly. I, firstly, would like to express my special thanks of gratitude to my supervisor, Mr. Ngo Tung Anh (MA, MBA) Vice Dean of the Faculty of Foreign Languages who gave me the golden opportunity to do this wonderful project on the topic The Reality of cryptocurrency in the world and in Vietnam. Tung Anh also gave me useful comments, remarks and encouragements through the learning process of this thesis.
Secondly, I would like to thank to my family and friends for giving encouragement, enthusiasm and invaluable assistance to me. Without the help of all these people, I might not be able to complete this subject properly. Banking Academy Graduation thesis ABSTRACTS In the development process of the economy of countries in the world, money plays a deeply important role because it is the medium of exchange, a unit of measurement and a storehouse for wealth. Money allows people to trade goods and services indirectly, and understand the price of goods.
It also gives us a way to save for larger purchases in the future. Different stages of the economy make the progress of the forms of money, from bartering to commodity money, and now we reach the highest point of the money form called cryptocurrency. Cryptocurrency invented, firstly, with the believe to change the way people make payments, then, nowadays, it have created an exploding wave in investment to gain benefits. Governments all over the world react differently on the trend of cryptocurrency because of its characteristics called decentralization.
It means that cryptocurrency does not suffer from any the regulation of the state management agencies. The research topic is the reality of cryptocurrency in the world and in Vietnam, the thesis not only analyzes the strengths and weaknesses of digital money but also demonstrate the reality situation by bringing out some cases related to hacks and frauds. Also, tables and figures are shown to support the work. As a result, the thesis will give recommendations against limitations that cryptocurrency has.
Banking Academy Graduation thesis LIST OF FIGURES AND TABLES FIGURES: Figure 2.1: The fall in price of Bitcoin on 3thAugust 2016 Figure 2.2: The valude of 1BTC from 2013 to 2017 Figure 2.3: The stable growth of BitConnect made many investors feel secure Figure 2.4: The value of BitConnect on Coinmacketcap (28/07/2017) Figure 2.5: Bitcoin value increment from 8thMay – 9thMay 2017 Figure 2.6: The number of users with key word “Bitconnect” on Google Figure 3.1: Bitcoin valuation from 8thFebruary 2017– 8thFebruary 2018 TABLES Table 2.2: Incredible profit BITKINGDOM applied on each package Table 2.6: High interest rate of iFan coin Banking Academy Graduation thesis TABLE CONTENTS PART A: INTRODUCTION. 3 CHAPTER I: GENERAL VIEW OF CRYPTOCURRENCY. The history of money. The concept of cryptocurrency.
The definition of cryptocurrency. The origins of cryptocurrency. Inflation and devaluation free. Freedom in transactions.
Economical on fee. Less risk for sellers and buyers. Lack of actual use. 15 CHAPTER II: THE REALITY OF CRYPTOCURRENCY IN THE WORLD AND IN VIETNAM.
Cryptocurrency market in the world. The world’s reaction on cryptocurrency. Well-kown cryptocurrency hacks in the world. Cryptocurrency market in Vietnam.
28 Banking Academy Graduation thesis 2. Vietnam government’s reaction. Well-known cryptocurrency scandals in Vietnam. 42 CHAPTER III: RECOMMENDATIONS………………………………….
Recommendations for the Government. Recommendations for exchanges. Recommendations for investors and users. RECAPITULATIONS AND CONCLUDING REMARKS.
LIMITATIONS AND PROPOSALS FOR FURTHER STUDY. 50 Banking Academy Graduation thesis PART A: INTRODUCTION 1. Background The global financial crisis of 2007 has cast its long shadow on the economic fortunes of many countries, resulting in what has often been called the “Great Recession”. It is believed that the global financial crisis resulted from US subprime mortgage and credit crisis.
Overall, 2009 was the first year since World War II that the world in recession, a calamitous turn around on the boom years of 2002 – 2007. It is undeniable that US experienced such a difficult period lasted over 4 years from late 2007 to early 2012, which left behind severe sequences for the US economy and global one as well. The mass of banks around the world collapsed, causing people to lose confidence in the banking system all over the world. In this period, a new term called “cryptocurrency” was born.
Cryptocurrency was created to be a type of money, which was expected to instead the fiat money and change the way people transact. Cryptocurrency also was hoped to replace the function of banks in general. Although the world has witnessed the rapid increase in value of cryptocurrency, especially Bitcoin, the original expectations have not been improved. It is because governments in the world are rejecting it as a form of money.
This thesis will mention and describe deeply several cases related to cryptocurrency hacks and frauds which are considered as cryptocurrency’s weaknesses. Research objectives The thesis, firstly, shows the history of money from the beginning of the economic history. Secondly, it focuses on introduce the new term in money market called “cryptocurrency”. Finally, cases that related to cryptocurrency hacks and frauds in the world and in Vietnam are described in details.
1 Banking Academy Graduation thesis 1. Reasearch subjects and scope Because of time and sources limitation, the thesis covers the real situation of money market and of cryptocurrency generally. Reasearch methodology This study will utilize both quantitative and qualitative data collection tools, but it is rooted in a quantitative position to further investigate the history of money from no money market till now as well as study obstacles that the economy and the world have to face through the progress of cryptocurrency. Moreover, statistics are collected from reliable sources such as reports, articles, available researches, books, websites which are clearly referred to the reasearch’s references.
Reasearch structure Chapter I: General view of cryptocurrency This chapter describes the history of money and introduces the new term “cryptocurrency”. Additionally, strengths and weaknesses of digital money are analyzed. Chapter II: The reality of cryptocurrency in the world and in Vietnam This chapter covers two main contents as the reaction of international and national governments on the cryptocurrency wave and cases of hack and fraud in the world and in Vietnam. 2 Banking Academy Graduation thesis Chapter III: Recommendations This chapter shows some recommendations from the writer’s perspective for governments, exchanges, and investors.
These recommendations might help to enhance the attraction and efficient of this field. PART B: DEVELOPMENT CHAPTER I: GENERAL VIEW OF CRYPTOCURRENCY 1. The history of money Money can be said to be one of the most important inventions for human development. It is a medium of exchange, a measure of value, a hoard, and so on.
Money has evolved over many periods and is increasingly convenient for users: bartering, gold coins, coins, paper money, electronic money, etc. Different countries and territories have different currencies. By 2012, there were 167 different currencies in circulation around the world. In short, money can be anything that can serve as a store of value, which means people can save it and use it later; unit of account, that is, provide a common base for prices; or medium of exchange, something that people can use to buy and sell from one another.
To put it a different way, money is something that holds its value over time, can be easily translated into prices, and is widely accepted. Many different things have been used as money over the history, for instance: cowry shells, barley, peppercorns, gold, and silver. Before the development of a medium of exchange – i., money – people would barter to obtain the goods and services they needed. Two individuals, each possessing some goods the other wanted, would enter into an agreement to trade.
For example, a person who specialized in fixing machines and needed to trade for eggs and bananas would have to find a farmer with a broken machine. But what if 3 Banking Academy Graduation thesis the farmer did not have anything that needed to be fixed? Or what if a farmer could only give the mechanic more eggs than the mechanic could reasonably use? That having to find specific people to trade with makes it very difficult to specialize. People might starve before they were able to find the right person with whom to barter. However, that is not where the problems end: Even if the mechanic could find a farmer is willing to trade food, he might not think a bunch of bananas is worth a fixed machine.
He would then have to devise a way to divide his service (a messy business) and determine how many bananas and eggs he is willing to take. These problems were solved when commodity money came: a type of good that functions as currency. Commodity is a physical item which is readily interchangeable with another item of the same type. Commodity money is a commodity that has intrinsic value.
Intrinsic value means that the commodity has value even if it is not used as money. In times of economic crisis, such as severe economic depressions or hyperinflation, people sometimes turn to commodity money instead of the money authorized by their governments. Commodity money has been used throughout the years and it is even used in the modern life in some circumstances. Commodities are classified into two categories: non-metallic commodities and metallic commodities.
Therefore, the commodity money is also composed of two types: non-metallic money and metallic money. Non-metallic commodity money is the oldest form of currency, very commonly used in traditional societies. Depending on the country, each locality, people use different kinds of goods as currency. In the 17th and early 18th centuries, for example, American colonialists used beaver pelts and dried corn or people used cattle and sheep in Greece and Rome.
In general, non-metallic currencies are more disadvantageous when playing currency roles such as: heterogeneity, perishability, difficulty in division, difficulty in preserving and transporting, it is only recognized in each zone area, each locality. As a result, non-metallic money is gradually eliminated as people start using the metallic money instead. Types of used metal include: copper, zinc, gold, silver. In general, metals have many advantages over 4 Banking Academy Graduation thesis non-metal goods when used as money such as: quality, weight (can be converted more accurately and easier).
On the other hand, it lags slower and is easier to split and is relatively less variable value. Through the practice of exchange and circulation of the metal, only two metals, gold and silver, are gradually are used to be long-term money because it has the same convenience that other metals do not have: homogeneity, simplicity, ease of storage, ease of movement. Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity.