Vietnam's government seeks to position country as 'regulated hub for digital assets in Asia': Dragon Capital

The Vietnamese Government has advanced the regulation of digital assets, with a resolution launching a five-year pilot framework for issuance and trading. This framework signals the Government’s intent to position the country as a regulated hub for digital assets in Asia, which could attract new capital inflows, write Dragon Capital analysts.

Vietnam’s equity market delivered another strong month in August, with the VN-Index repeatedly seeing new records and briefly approaching 1,700 before late-month profit taking.

The index gained 11.5% in total return USD terms, its best performance since May 2020. Liquidity was exceptionally strong, with combined daily turnover averaging $1.9 billion and peaking at $3.3 billion on August 5.

Domestic participation was a key driver, with more than 250,000 new trading accounts opened in August, up 13.8% month-on-month. This offset continued net foreign selling, which was concentrated in a Vingroup block trade and in banks, steel, and technology.

The rally is still being driven primarily by domestic retail investors, while foreign flows remain cautious. Momentum and liquidity are strong, but volatility is likely to persist, with profit taking and shifts in trade, geopolitics, or FX acting as potential triggers.

Notably, the equity market’s IPO pipeline has reignited with strong momentum. Techcom Securities (TCBS) is finalizing its listing, expected by year-end. With a projected market capitalization above $4 billion, it could make it Vietnam’s largest listed brokerage.

This has already triggered a mid-August re-rating among peers, underscoring the sector’s sensitivity to listing milestones and showing how upcoming IPOs can act as catalysts.

Following TCBS’s lead, VP Bank Securities is also preparing to IPO, aiming to raise approximately $170 million with a potential float of 25% expected within the coming quarters.

Additional offerings are anticipated from infrastructure and retail-oriented groups including Gelex Infrastructure, C.P. Group, Highlands Cofee, and spin-offs from Mobile World retail chains.

Macro and sector indicators reinforced the positive backdrop. Public investment disbursements surged 34.5% year-on-year in August, while implemented FDI rose 12.5%, lifting total registered commitments 27.3% year-on-year to $26.1 billion, highlighting the strong support from both public and private capital.

Trade activity maintained double-digit growth, with August exports rising 14.5% year-on-year and imports climbing 17.7%, resulting in a monthly trade surplus of approximately $3.7 billion.

Inflation remained well controlled, with August CPI up 3.2% year-on-year and core inflation stabilizing around 3.2%, slightly easing from July.

Industrial production expanded by 8.9% year-on-year, while PMI retreated marginally to 50.4 as order flows normalized from July’s elevated levels.

The banking sector saw high credit growth of approximately 11.1% in the year to date. The State Bank of Vietnam (SBV) halved reserve requirements for banks under transfer programs and used cancellable forward contracts to stabilize the VND, which has depreciated about 3.3% in the year to date, reflecting a willingness to act decisively to support both liquidity and currency stability.

The Government also advanced the regulation of digital assets, with Resolution 05/2025/NQ-CP launching a five-year pilot framework for issuance and trading.

Licensed platforms will require a minimum of approximately $380 million in capital with majority institutional backing, while foreign ownership will be capped at 49%. Transactions must be settled in VND, and only Vietnamese firms may issue new assets.

With Vietnam already ranking fifth globally in crypto adoption and an estimated $100 billion in holdings, the framework is a significant step in formalizinga rapidly expanding market.

We believe this framework reduces the risk of speculative volatility by limiting unregulated platforms, while aligning with the broader push to deepen Vietnam’s capital markets. It also signals the Government’s intent to position the country as a regulated hub for digital assets in Asia, which could attract new capital inflows.