Vietnam needs to study establishing digital asset exchange: Party chief

Vietnam's Party chief To Lam has emphasized the need to study the application of a sandbox mechanism to establish an exchange for digital assets.

During a recent working session with the Party Central Committee’s Commission for Policies and Strategies on economic growth goals, Lam said cryptocurrencies such as Bitcoin and Ethereum are considered popular virtual assets.

However, Vietnam currently lacks a specific definition for virtual currencies and assets, he stated, noting that the current regulations only mention digital money, which is pegged to fiat currency and exists in the form of prepaid bank cards or e-wallets.

The Party General Secterary agreed with the commission’s proposal to manage these digital currencies as a type of virtual asset to prevent negative impacts on the economy and society while mobilizing resources and value for the country.

According to Lam, the National Assembly - the country's legislature and government agencies need to quickly institutionalize and specify regulations to manage this field. They should study the application of a sandbox mechanism to establish a digital asset exchange.

“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,” he stressed.

Experts said the lack of a legal framework for digital assets has led many businesses to register in Singapore or the U.S. and then operate in Vietnam, causing losses of competitive advantages and tax revenue. For users, the lack of transparency leads to risks in transactions.

At a meeting with small and medium-sized enterprises on Thursday, Prime Minister Pham Minh Chinh also instructed the Ministry of Finance and the Ministry of Science and Technology to develop policies and regulations for digital assets and a sandbox mechanism. These agencies are required to complete this work by the end of Q2.

Experts believed that an early issuance of regulations for digital assets identification and valuation methods will help businesses better access commercial bank financing, enabling them to secure capital for investment.

Data released by the Vietnam Blockchain Association in August 2024 showed that between 2021-2022, Vietnam ranked in the top three globally for the percentage of the population owning digital assets (21% of total population), following the UAE and the U.S.

Vietnam ranked third in the world for cryptocurrency gains in 2023, only after the U.S. and the UK, with nearly $1.2 billion, according to U.S. blockchain analysis firm Chainalysis.

Vietnam was one of five Asian markets in the top 10 countries for cryptocurrency gains last year, besides China, Indonesia, India, and South Korea, it added.

Earlier, when drafting a resolution on the financial center model in Ho Chi Minh City and Danang, the Ministry of Planning and Investment proposed testing sandbox mechanisms including exchanges for digital assets and cryptocurrencies. It is expected that transactions involving digital assets and cryptocurrencies in the financial centers will be conducted from July 1, 2026.