Vietnam needs regulations on digital, virtual assets

Vietnam needs to develop regulations on digital and virtual assets as Industry 4.0 drives the emergence of new assets and the lack of rules poses one of the most significant legal problems in asset ownership rights.

Currently, digital and virtual assets are not recognised as property in Vietnam.

Experts said that the existing legal framework in Vietnam was encountering difficulties in tolerating new types of assets in the Industry 4.0 era.

Le Thuy Nga from the Institute of Legal Science pointed out that Vietnam lacks a legal corridor to identify the owners and transactions of assets of new technology applications.

This caused uncertainty in protecting individual rights or interests in the holding, transferring, and inheritance of crypto assets, especially in cases of protection against theft or expropriation.

The Law on Corporate Income Tax and the Law on Personal Income Tax were not applicable to transactions of crypto assets, Nga said.

Due to the lack of a clear legal framework, tax authorities could not collect taxes from investing and trading in crypto assets, while it also confused managing other sectors like opening cryptocurrency exchanges or launching initial coin offerings to raise capital.

Nga said that the lack of regulations, together with low awareness about virtual assets and cryptocurrency, has also led to an explosion of fraudulent activity. Confusion between the concepts of cryptocurrency and digital assets also caused problems in state management.

From a legal perspective, Nga said that cryptocurrency was not recognised as a legal currency and payment method in Vietnam, adding that it was necessary to have regulations clearly distinguish cryptocurrency from electronic assets.

Experts said that the biggest legal problem with asset ownership in the context of the Industry 4.0 lay in the fact that there were no rules that clarify digital assets.

At the third session of the 15th National Assembly in June, Governor of the State Bank of Vietnam Nguyen Thi Hong said that it was necessary to clarify electronic money, cryptocurrency and virtual assets.

Hong said that electronic money involves an electronic store of monetary value on a technical device, adding that the decree about cashless payments was being amended to clarify this definition.

Like bitcoin, Hong said, cryptocurrency and virtual assets have not been recognised as legal currencies issued by central banks. These currencies were only identified in specific communities like gaming or technology.

Each country has a different way of managing virtual currency. For Vietnam, relevant ministries and agencies are studying the legal framework for cryptocurrency.