Vietnam Moves to Regulate Crypto Amid High Adoption

Story Highlights

• Vietnam Accelerates Crypto Regulations Amid Rising Adoption

• PM Chinh Orders Legal Framework for Digital Assets This Month

• Vietnam Eyes ‘Sandbox’ Model for Safe Crypto Trading

Vietnam is taking an important step toward cryptocurrency regulation. Prime Minister Pham Minh Chinh ordered the Ministry of Finance and the State Bank of Vietnam to establish regulations for digital assets before the end of this month. A rising number of governments now recognize cryptocurrency’s significance in economic development, prompting this decision.

Ministry of Finance to Draft Crypto Framework in Vietnam

Cryptocurrency adoption has made Vietnam stand as one of the top countries in recent years. Digital assets have become widespread among 21% of Vietnamese people during both 2021 and 2022, positioning Vietnam as one of the leading three nations in cryptocurrency adoption.

The modern effort to regulate crypto assets has drawn inspiration from U.S. President Donald Trump, who proposed creating a federal crypto reserve. The national backing given by Donald Trump for digital assets motivated various countries to create their regulatory frameworks.

The Ministry of Finance will initiate the moves towards future progress. The institution will prepare rules for digital asset management while establishing a transparent legal system. The Vietnamese government lacks explicit regulations that define Bitcoin and Ethereum alongside other cryptocurrencies. The current legal framework of Vietnam only permits electronic money systems that directly link to prepaid bank cards and e-wallets backed by regular currencies.

Vietnam Considers ‘Sandbox’ Model for Crypto Trading

Many Vietnamese crypto businesses operate in Singapore and the United States since regulatory standards are lacking in the country. The absence of regulatory standards has caused Vietnam to forfeit its potential tax collection while also forfeiting business opportunities. A legal framework operator will support Vietnamese economic stability by both retaining existing businesses and drawing new investments from inside and outside the country.

Currently, a parallel regulatory movement towards cryptocurrency exists in various nations. In February, Pakistan introduced the establishment of a National Crypto Council as part of its regulatory framework for digital assets. The national council seeks to manage digital assets alongside investment attraction. Vietnam identifies a “sandbox” system as a potential solution to constructing a safe cryptocurrency trading platform.

Lastly, Prime Minister Chinh also emphasized the need to monitor bank interest rates so that individuals and businesses can access loans at fair rates.