Vietnam will introduce a framework of legal protection for digital assets at the end of this month, in an effort to boost economic growth.
Per reports in local media, the move comes after Prime Minister Phạm Minh Chính signed Directive No. The directive No. 05 sets a growth goal of at least 8% for the country by 2025.
It has been assigned to the Ministry of Finance (MOF), and State Bank of Vietnam, that they finalize proposals and present them by the end of next month.
“The Party has directed, the Government has agreed, the National Assembly has agreed, the People have supported, and the Fatherland has expected,” Chính said, announcing the proposal.
This proposed legal framework should provide more clarity and security for businesses that deal with crypto, by allowing them to gain access to funding as well as operate within a secure regulatory setting.
Vietnam and crypto
As of now, the legal status of crypto-transactions in Vietnam is still in the gray zone, since the country has not yet recognized the asset class.
In spite of this, the crypto-trading industry is still very popular. To avoid local laws, many companies register in other countries, such as Singapore and America.
Due to this practice, domestic firms have suffered from a reduction in their competitiveness and lost taxes. The government is calling for a comprehensive regulatory framework in light of these facts.
Vietnam is a country with a strong crypto presence. The country ranks fifth in the 2024 Global Crypto Adoption Index by Chainalysis, a blockchain-analysis firm.
During the 2023–24 period, blockchain market investments flowing into Vietnam exceeded $105 billion.
"Creating this legal framework will help businesses access bank capital and provide a safer, more transparent environment for crypto transactions," “Said a representative of the Ministry of Finance.
Vietnam's Party General Secretary, To Lam, recently endorsed the need to establish a legal framework for virtual assets at the Party Central Committee’s Commission for Policies and Strategies session.
“Policies need to be in place to ensure that Vietnam does not fall behind, miss opportunities, or create a gap with new financial models and modern trading methods,” Lam said.
Crypto in Asia
In the same way that Vietnam has positioned itself to be a regulator of digital assets, nearby financial hubs such as Singapore and Hong Kong were proactive in creating comprehensive crypto regulations.
Singapore's regulatory framework, established under the Payment Services Act (PSA) of 2019, governs digital payment token (DPT) providers, requiring them to adhere to stringent compliance and licensing procedures.
Singapore is expected to increase the number of licenses it issues for digital assets by 2024. In fact, 13 Major Payment Institutions (MPI) licences will be granted to crypto exchanges.
Hong Kong also took steps to consolidate its role as a major player on the global crypto markets, by launching a detailed road map to improve its digital assets ecosystem.
In the last month, the Securities and Futures Commission introduced the “ASPIRe” Roadmap for the growth of digital assets, outlining five strategic initiatives that focus on Access, Safety, Products, Infrastructure and Relationships.
As of 2024 the SFC will have licensed ten virtual asset trading platforms. It is also actively expanding its licensing regime to include OTC trading, custodians, and other trading platforms.
