The cryptocurrency market in Vietnam is abuzz with government initiatives, regulatory developments, and major investments. This article elaborates on the status of the market with respect to local government initiatives, scenarios of compliance, major investments, and main players.
Since October 2022, the Vietnamese government has been vocal about the urgent need to update the regulatory legislation regarding activities in the digital currency sector. The fact that despite their active trading, virtual assets do not get an official recognition, has troubled this country's administration. Accordingly, the Vietnamese administration has called for an amendment to the national anti-money-laundering legislation and better guidance on virtual assets and blockchain technology.
In June 2021, Vietnam launched projects geared toward the development of blockchain adoption and cryptocurrency applications. Under Decision No. 942/QD-TTg supporting the strategy for developing e-government in the period from 2021 to 2025 with a vision of 2030, the Prime Minister assigned the State Bank of Vietnam to research and build models concerning the management of cryptocurrencies by blockchain. It was slated for a 2021 to 2023 pilot.
There is no legal framework for the oversight of the cryptocurrency sector in Vietnam. The government launched a series of investigations and assessments into probable regulations in a bid to oversee the field. This would mean consideration for surveillance measures, governance techniques, and taxation policies allied with the activities that make cryptocurrencies more transparent and accountable.
Currently, cryptocurrencies are not taxed in Vietnam, which has made it see massive digital currency adoption. This no-tax policy also comes with very minimal protection under the law for persons involved in crypto transactions. Observing this shortage, the Vietnamese government itself is committed to the establishment of proper guidelines and regulations concerning the use of cryptocurrencies, including related aspects of taxation. In this respect, crypto users and investors in Vietnam need to be updated regarding the changing regulations affecting the tax environment.
Some of the major regulatory bodies in Vietnam in search of cryptocurrency solutions include the State Bank of Vietnam, the Ministry of Finance, and the State Securities Commission. Another very important agency that can bring control and see to it that there is compliance with laws, regulations, and standards in the cryptocurrency market is the Vietnam Blockchain Association.
Significant investments that have been made into the Vietnamese cryptocurrency market have been in mergers and acquisitions, partnerships, funding, and launching of products and services. An announcement in February 2024 indicated that blockchain development in Vietnam is to attract a US$100 million investment. AEX, the digital asset platform, has planned to invest in the strengthening of the local cryptocurrency ecosystem by investing in local projects and providing liquidity incentives to DeFi projects as well as ensuring compliance with the regulations by cryptocurrency firms.
Key players in the Vietnamese cryptocurrency market include Var Meta, 1 More Team LLC, Pando Infinity, Newwave Solutions, Ekotek, SENS, Spirit Labs, BTS Digital Solutions, Kaopiz, and Dirox ToSquad. All of these companies are pioneers in the frontline of innovation towards growth for the Vietnamese cryptocurrency ecosystem.
The cryptocurrency market in Vietnam is expected to reach US$184 million in 2028 from US$76 million in 2023, at a CAGR of 22.96%. The potential size of the Vietnamese cryptocurrency market could be huge, largely driven by government initiatives and regulatory developments with large investments on their backs. As such, market players will want to pace themselves against changes in the regulatory environment and associated investment opportunities. Provided big players and regulators remain very active, Vietnam shall be well-placed to lead the global charge regarding cryptocurrencies.