Vietnam Bets on Regulation to Tame Its Wild Crypto Passion

Vietnam has initiated a five-year pilot program to regulate its cryptocurrency market, introducing stringent measures aimed at ensuring financial stability and investor protection. The program, which became effective immediately, mandates that all crypto transactions—ranging from issuance to trading and payments—be conducted exclusively in Vietnamese dong (VND). The pilot, announced by the Government Electronic Newspaper of Vietnam, is designed to test regulatory frameworks while promoting transparency and security within the industry [1].

Under the new regulatory framework, only Vietnamese enterprises registered as limited liability companies or joint stock companies under the Law on Enterprises are permitted to issue crypto assets. This restriction aims to limit foreign influence and ensure that the domestic market remains under national control. The resolution also explicitly prohibits the issuance of crypto assets backed by fiat currencies or securities. Instead, assets must be issued based on real, tangible assets [1].

The pilot program mandates that foreign investors interested in participating in the crypto market must do so through crypto asset service providers (CASPs) licensed by the Ministry of Finance. This measure is intended to create a controlled and regulated environment for cross-border participation, ensuring that all operations adhere to Vietnam’s financial and legal standards [1].

The initiative is part of a broader strategy to manage the risks associated with the growing cryptocurrency sector. Deputy Prime Minister Ho Duc Phoc signed the resolution, emphasizing the importance of maintaining financial stability while encouraging innovation. The report outlines the principles guiding the pilot, including caution, control, safety, transparency, and the protection of investor rights. The government aims to balance the potential of the crypto market with the need to prevent speculative bubbles and fraudulent activities [1].

Vietnam, recognized as one of the top countries globally in terms of cryptocurrency adoption, has previously shown strong public interest in digital assets. This pilot program reflects the government’s effort to formalize and regulate a market that has grown largely outside the scope of traditional financial oversight. Analysts note that the move could influence other Southeast Asian countries considering similar regulatory approaches [1].

The pilot’s success will depend on how effectively the government can enforce compliance and adapt the framework based on market feedback over the five-year period. While the immediate effects are limited to a controlled environment, the long-term implications could shape the future of crypto regulation in the region.

Source: [1] Vietnam Launches 5-Year Crypto Market Pilot (https://cointelegraph.com/news/vietnam-five-year-crypto-pilot-strict-controls)