Vietnam to pilot crypto trading

The government has recognized the global trend in crypto management to support economic development, and has therefore ordered a drafting of regulations on cryptos and digital assets, Deputy Minister of Finance Nguyen Duc Chi told reporters Wednesday.

His ministry is collaborating with the State Bank of Vietnam in drafting regulations as required by Prime Minister Pham Minh Chinh.

A crypto and digital asset trading platform will be organized and operated by entities authorized by the State. This means the State will protect the legitimate rights and interests of investors, Chi said.

Physical representations of the Bitcoin cryptocurrency. Photo by Reuters

The finance ministry has also been assigned to develop regulations allowing Vietnamese companies to issue virtual assets to raise financial resources. He said that this would help businesses keep up with global trends in virtual asset ownership, contributing to economic development and supporting growth targets.

Cryptocurrencies such as Bitcoin, Ethereum, and others are considered popular virtual assets. However, Vietnam has yet to provide a specific definition for virtual currencies and digital assets.

Current regulations only mention the concept of electronic money pegged to fiat currency, existing in forms such as bank prepaid cards and electronic wallets.

The lack of a legal framework for digital assets has led many businesses to register in Singapore or the U.S. to carry out their Vietnam operations, resulting in a competitive disadvantage and tax revenue losses.

Party General Secretary To Lam last month also highlighted the need to develop a sandbox for digital asset trading.

Vietnam, in 2021 and 2022, ranked among the top three countries globally in ratio of digital asset ownership at 21% of the population, trailing only the United Arab Emirates and the U.S., according to data from the Vietnam Blockchain Association.

In 2023, the inflow of digital assets into Vietnam reached US$120 billion, according to a report by market analysis firm Chainalysis.