Vietnam's Crypto Experiment: Testing Stability Amid High Stakes

Vietnam has launched a five-year pilot program for regulated cryptocurrency trading, marking a significant shift in its approach to digital asset management. Under the new framework, only Vietnamese-based entities are permitted to operate exchanges, and all transactions—ranging from issuance to trading and payment—must be conducted exclusively in the Vietnamese dong. This move aims to bring a largely informal market into a structured regulatory environment while studying the viability of digital assets under stringent oversight.

To qualify for participation in the pilot, exchanges must meet substantial financial thresholds. Applicants must have a minimum paid-in capital of 10 trillion VND (approximately $379 million), with at least 65% of that capital provided by institutional investors. Additionally, foreign ownership of these platforms is capped at 49%, and at least 35% of the capital must come from licensed financial or technology firms such as banks, securities companies, or insurance firms. These requirements are designed to ensure market stability and prevent speculative overruns by limiting access to well-capitalized local players.

The pilot program also imposes strict guidelines on the types of tokens that can be issued. Only digital assets backed by tangible, real-world assets can be created under the pilot, excluding stablecoins or tokenized stocks that rely on fiat currency or traditional securities. This restriction is intended to mitigate systemic risks by ensuring that tokens have a verifiable and stable asset base, potentially reducing volatility and fraud. Analysts suggest that these rules could foster a more transparent market but may also concentrate business among a few large entities due to the high capital requirements.

Foreign investors are permitted to participate in the market but must do so through licensed local service providers and within the foreign ownership limits. This structure allows for limited foreign capital and technological input while maintaining control over the domestic ecosystem. The pilot is expected to contribute to Vietnam’s broader infrastructure development in the digital asset space, particularly in building institutional and regulatory frameworks that can support long-term growth.

The government will monitor the pilot over five years, after which it will decide whether to expand, revise, or terminate the program. Observers note that if the initiative is successful, Vietnam could position itself as a leader in regulated crypto markets in Southeast Asia. However, the high entry barriers and restrictive rules may limit competition and innovation in the short term.

According to recent blockchain analytics, Vietnam ranks among the top three countries in global crypto adoption, with a penetration rate three to four times the global average. The Vietnam Blockchain Association reported that over $105 billion in blockchain-related capital flowed into the country between 2023 and 2024. These figures highlight the growing interest in digital assets and underscore the significance of the government’s decision to regulate the sector more formally.