Vietnam Approves Crypto Law to Meet FATF Standards, Boost Digital Economy

On June 14, 2025, Vietnam's National Assembly approved the Law on Digital Technology Industry, which will take effect on January 1, 2026. This law is a significant step in Vietnam's efforts to meet the standards set by the Financial Action Task Force (FATF) after being gray-listed in 2023 due to deficiencies in Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) measures. The law distinguishes between crypto assets, such as Bitcoin and Ether, and virtual assets, which are non-financial digital items. It excludes Central Bank Digital Currencies (CBDCs) and securities from its scope. The legislation mandates identity checks, transaction monitoring, and reporting obligations to detect and prevent digital asset fraud, addressing enforcement gaps that have been a concern for the FATF.

The Law on Digital Technology Industry introduces a comprehensive legal framework for digital assets, including classification, licensing requirements, and robust compliance mechanisms aligned with international standards. By regulating its crypto sector, Vietnam aims to address FATF concerns, boost investor confidence, and position itself as a digital economy hub in Southeast Asia. The law also provides a regulatory sandbox for controlled testing of blockchain, DeFi, and virtual asset technologies, fostering innovation in the sector. Additionally, it offers tax breaks, grants, and import duty exemptions for startups, SMEs, and foreign tech investors, as well as visa and work permit benefits for digital experts.

The law's classification of digital assets into virtual and crypto assets facilitates a structured legal framework that enables regulated use of these assets while differentiating them from mainstream financial products. It tasks the government with licensing, oversight, and operational guidelines for each category, signaling a move toward transparency and compliance. The law also includes provisions for pilot sandbox mechanisms for virtual asset products and services, as well as tax exemptions, subsidies, and workforce training programs for blockchain startups. This legal recognition and regulatory framework are expected to attract global startups and investors, further boosting Vietnam's digital innovation ecosystem.

Vietnam's new crypto law is a critical step toward aligning its digital asset sector with FATF standards on AML and CFT. The law officially legalizes crypto ownership and use, separates crypto assets from virtual assets, and brings crypto exchanges and wallet providers under state supervision. It also excludes fiat-backed stablecoins from the crypto asset category, ensuring consistent oversight and reducing systemic risk. These reforms support Vietnam's goal of exiting the FATF gray list by establishing a transparent, controlled crypto environment that is compliant with global standards. The legislation also empowers the government to define licensing rules, asset classification, and oversight mechanisms, ensuring that crypto service providers and financial institutions operate within a regulated environment.

The law provides Vietnamese authorities with a clear legal framework to investigate, prosecute, and deter digital asset fraud. It introduces compliance obligations such as identity checks, transaction monitoring, and reporting duties. Two recent fraud cases highlight the urgency of these reforms: in February 2025, authorities arrested four individuals behind BitMiner, a fake crypto mining scheme that defrauded 200 victims of over 4 billion Vietnamese dong. In December 2024, the Hanoi police disrupted a scam involving Million Smiles, which used deceptive ads to promote a cryptocurrency called QFS, resulting in losses of about $1.17 million. The law's provisions facilitate greater cooperation with international regulators, allowing Vietnam to collaborate with foreign authorities on cross-border investigations and address transnational crypto crimes.

Vietnam's new crypto law is part of its ambition to become a digital technology hub in Southeast Asia. By formally recognizing crypto assets, the government welcomes innovation and attracts global startups and investors. The law offers significant incentives for tech companies, including tax reductions, subsidized access to digital campuses and innovation parks, and grants and infrastructure support for R&D in semiconductors and cloud technology. The government is also investing in digital education through vocational programs, university-industry collaboration, and tech apprenticeships, ensuring a skilled workforce for the future. These combined efforts aim to establish Vietnam as a regional leader in digital innovation.

Vietnam's cryptocurrency law is central to its FATF compliance strategy. By defining virtual and crypto assets and enforcing rules on licensing, AML/KYC, cybersecurity, and transaction oversight, the country has aligned itself with FATF Recommendation 15, one of the key issues cited during its gray listing. In parallel, the State Bank of Vietnam has tightened AML rules, updated risk assessments, standardized reporting practices, and strengthened CDD under revised Circular 09. If fully implemented by January 2026, these reforms could pave the way for Vietnam's removal from the gray list. A clear regulatory environment also enhances investor confidence, reassuring international crypto businesses, venture capitalists, and tech firms. Moreover, seamless integration between crypto and traditional banking improves access to capital markets and institutional finance. Ultimately, Vietnam's crypto regulation not only addresses FATF concerns but also enhances its global image as a transparent and innovation-friendly economy.