- Vietnam aims to create a legal framework for digital assets to boost market growth.
- Despite regulatory challenges, cryptocurrency adoption in Vietnam remains high.
- Vietnam’s digital asset sector saw US$120 billion in flows and 17 million owners in 2023.
Vietnam is increasing its pace to oversee digital assets. Prime Minister Pham Minh Chinh has directed the Ministry of Finance and the State Bank of Vietnam to develop a legal framework for digital assets. This plan, expected to be finished within this month, addresses the increasing role of digital currencies in the country’s economy.
Lack of Crypto Laws Hurting Vietnam’s Economy
Currently, Vietnam lacks a legal definition for digital currencies like Bitcoin and Ethereum. This lack of legal regulation for digital assets has slowed down the sector’s growth.
Many businesses have chosen to set up shop in countries like Singapore and the United States. These moves have led to a loss of competitive edge and a potential decrease in Vietnam’s tax revenue.
Related: Global Crypto Adoption Hits 562 Million Users as UAE, Singapore Dominate
Vietnam Sees High Crypto Adoption Despite Uncertainty
However, despite regulatory uncertainties, cryptocurrency adoption in Vietnam has been notably high. According to the Vietnam Blockchain Association, the country ranked in the top three globally for cryptocurrency ownership. Around 21% of the population held digital assets in 2021 and 2022.
Additionally, the flow of digital assets into Vietnam reached US$120 billion in 2023, as reported by Chainalysis. This shows the increasing interest in crypto assets nationwide, emphasizing the importance of a formal legal framework to effectively manage the sector.
Sandbox Proposed to Test Crypto Trading Platform
To address the lack of a clear regulatory framework, Party General Secretary To Lam has called for the creation of a controlled testing mechanism, or sandbox. This sandbox would allow the creation of a digital asset trading platform.
This proposal will help the government gain a better understanding and regulate the market. Recently, PM Chinh also instructed the Ministry of Finance and the Ministry of Science and Technology to create policies and regulations for digital assets by the second quarter of 2025.
Related: Vietnam Bets Big on Blockchain With Ambitious 2030 Strategy
Crypto adoption in Vietnam grew through 2023, with nearly 17 million people reported to own digital assets. Additionally, Vietnamese investors earned about 1.2 billion USD in profits from Bitcoin and other digital assets during the year.
As Vietnam works towards establishing a legal foundation for digital assets, the country faces both opportunities and challenges. Ultimately, the proposed regulations will help formalize the market, strengthen the local economy, and generate much-needed tax revenue.
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