Vietnam Is Drafting Regulations on Cryptos and Digital Assets to Support Economic Development

The government has recognized the global trend in crypto management to support economic development, and has therefore ordered a drafting of regulations

The Vietnamese government is currently working on drafting regulations for crypto and digital assets, Deputy Minister of Finance Nguyen Duc Chi revealed on Wednesday.

This initiative follows the government’s recognition of the global trend in managing crypto to support economic development, for which it has ordered the Ministry of Finance to cooperate with the State Bank in drafting the regulations as requested by Prime Minister Pham Minh Chinh.

During a press conference, Chi disclosed that a crypto and digital asset trading platform would be organized and operated by entities authorized by the State. This involvement from the State aims to protect the legitimate rights and interests of investors.

The Ministry of Finance is also tasked with developing regulations permitting Vietnamese companies to issue virtual assets in order to raise financial resources.

The deputy minister explained that this measure would help businesses keep pace with the global trends in virtual asset ownership, further contributing to economic development and supporting the set growth targets.

Common cryptocurrencies like Bitcoin, Ethereum, and others are recognized as popular virtual assets. However, Vietnam does not yet have a specific definition for these virtual currencies or digital assets.

The existing regulations only mention the concept of electronic money pegged to fiat currency, which exists in forms like 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. in order to carry out their Vietnam operations, placing them at a competitive disadvantage and leading to losses in tax revenue.

Moreover, Party General Secretary To Lam recently pointed out the need to develop a sandbox for digital asset trading.

In 2021 and 2022, Vietnam ranked among the top three countries globally in terms of the ratio of digital asset ownership to the population, at 21%. This puts it behind only the U.A.E. and the U.S., according to data from the Vietnam Blockchain Association.

Furthermore, a report by market analysis firm Chainalysis shows that in 2023, the inflow of digital assets into Vietnam reached $120 billion.