Hanoi (VNA) –ཧ Cryptocurrencies, virtual currencies, and crypto assets have been emerging in the global financial landscape. Many nations have already developed regulatory frameworks to manage their transactions, and Vietnam is no exception.

This month, the Ministry of Finance will submit a report to the Government, proposing a resolution that allows the pilot operation of an exchange for cryptocurrencies, virtual currencies, and crypto assets, which is expected to open significant economic opportunities while necessitating an appropriate legal framework. According to US blockchain analytics firm Chainalysis, over 100 billion USD flowed into Vietnam’s crypto asset market between 2022 and 2024, doubling the country’s foreign direct investment (FDI) inflow during the same period. Vietnam ranked third globally in cryptocurrency adoption in 2023 and seventh in terms of the number of crypto asset holders last year. A report by Triple-A estimates that 17 million Vietnamese citizens, roughly 17% of the population, own crypto assets, placing the country fifth worldwide. Phan Duc Trung, Chairman of the Vietnam Blockchain Association, viewed these figures as a sign of a significant 'shadow economy' that requires proper regulation to be integrated into the formal financial system. Vietnam is trialling a legal framework for crypto asset service providers, particularly crypto asset exchanges, Trung said. This is not only the first step towards formal regulation but also a strategic move to unlock an unrecognised economic resource. Lynn Hoang, Vietnam Country Director at Binance, noted that a regulated exchange aligns with global trends. In emerging sectors like crypto assets, a well-managed environment not only protects users but also fosters innovation, encourages widespread adoption, and enhances market stability. She elaborated that a pilot exchange, operating within a legal framework, could bolster investor confidence and attract traditional investors to the cryptocurrency sector. Vietnam currently lacks comprehensive legal protections against fraud and disputes, particularly as international exchanges, including less transparent platforms, continue to enter the market. Trung said he believes that establishing a regulatory framework will not only mitigate risks but also facilitate capital flows from digital assets into the economy. It would enable the government to tax crypto asset transactions while curbing illicit financial activities. At the same time, investors would gain legal protection and a clearer understanding of legitimate trading practices. Such establishment is also a crucial step for Vietnam to exit the Financial Action Task Force (FATF) grey list. Additionally, it would encourage the adoption of blockchain technology in finance, logistics, health care, and education, creating a sustainable innovation ecosystem and boosting digital transformation within businesses and society. According to Trung, Vietnam should approach digital asset and crypto asset regulation in two phases. The first phase should focus on building a pilot legal framework for crypto assets, creating a foundation for subsequent decrees once the digital technology industry law is ratified by the National Assembly. The second phase would implement regulations based on policies piloted for international financial centres in Ho Chi Minh City and Da Nang. “I believe that with a policy framework aligned with international standards, Vietnam can establish a comprehensive, flexible, and effective regulatory environment to manage and develop the crypto asset market safely and sustainably,” he concluded./.