Vietnam Turns Crypto Wild West Into Regulated Frontier

Vietnam has launched a five-year pilot program to regulate its rapidly growing cryptocurrency market, marking a significant shift in policy as it seeks to bring order to a sector that has flourished largely without oversight. The initiative, announced by the government on Tuesday, mandates that all crypto transactions—issuance, trading, and payments—must be conducted in Vietnamese dong. Only Vietnamese companies are permitted to operate trading platforms, issue tokens, and engage in licensed trading activities.

To qualify for operation, exchanges must hold a minimum capital of 10 trillion dong, equivalent to approximately US$379 million, with at least 65% of this capital coming from institutional investors. Additionally, foreign ownership in trading platforms is limited to a maximum of 49%, reinforcing the government’s emphasis on domestic control. These conditions establish a high threshold for market entry, aiming to ensure financial stability and reduce exposure to volatile or unregulated crypto activities.

The pilot also prohibits the issuance of crypto assets backed by fiat currencies or securities, requiring them to be tied to tangible real assets. This restriction is intended to prevent synthetic or leveraged crypto products that could amplify systemic risks. All token sales to foreign investors must be facilitated through licensed crypto asset service providers (CASPs) under the supervision of the Ministry of Finance.

Vietnam’s move follows the passage of the Law on Digital Technology Industry in June, which provided a legal framework for classifying and regulating digital assets for the first time. The government has also developed NDAChain, a permissioned blockchain system designed to support the country’s national digital infrastructure, which is managed by the Ministry of Public Security.

The pilot is expected to appeal to both domestic and international investors. With an estimated 17 million Vietnamese holding crypto assets valued at over $100 billion, the government aims to bring these informal holdings into a regulated environment. Once the first license is issued, existing holders will have six months to migrate their assets to approved platforms. After this period, trading on unregulated exchanges will be deemed illegal, although specific penalties have not yet been outlined.

By pegging all crypto transactions to the local currency and mandating domestic ownership of platforms, the government is attempting to balance innovation with risk management. The pilot is designed to last five years, allowing regulators to monitor market behavior and evaluate the effectiveness of safeguards before deciding on long-term regulatory adjustments.

The pilot reflects Vietnam’s broader digital transformation strategy, where the government is gradually integrating emerging financial technologies into its economic framework. As one of the top five countries for crypto adoption globally, according to Chainalysis, Vietnam’s approach could influence regional regulatory trends and provide a model for managing digital asset markets in developing economies.