Vietnam to pilot digital currency exchange

The Ministry of Finance will this month submit to the Vietnamese Government a proposal on legal frameworks for digital currencies, including allowing a pilot exchange for this kind of asset.

The finance ministry and the State Bank of Vietnam are studying such legal frameworks which will be lodged with Prime Minister Pham Minh Chinh within March per his request.

"Digital assets are a complex and new issue for Vietnam and many countries. Countries are studying ways to transparently manage this type of asset, in order to serve socio-economic development," Deputy Minister of Finance Nguyen Duc Chi said at the government's monthly press meeting on Wednesday.

Chi noted that the Government leaders saw the trend and requested early completion of legal frameworks for virtual currencies and digital assets.

A pilot exchange will offer investors a place to trade and invest in this type of asset. The exchange will be organized and operated by units licensed by the State. That means the State will protect the legitimate rights of investors when participating in this exchange, he added.

Chi said that the finance ministry has been assigned to develop regulations allowing Vietnamese enterprises to issue virtual assets to mobilize financial resources. This will help them catch up with the common trend of virtual assets, contributing to the country's economic development and growth goals.

Currently, buying, selling and using virtual currencies in Vietnam do not have any legal basis. It is worth noting that although not officially recognized, cryptocurrency transactions have still taken place in the country.

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.

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.

The country 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.