Vietnam's Crypto Gamble: Regulation vs. Innovation in a $379M Bet

Vietnam has launched the first national pilot program for cryptocurrency trading, marking a significant step in the country’s approach to regulating digital assets. The initiative, which spans five years, is designed to bring a largely informal and unregulated crypto market into a formal system under strict oversight. Under the program, only licensed Vietnamese enterprises can issue digital assets, and all transactions must be conducted in the Vietnamese dong, with assets required to be backed by tangible, non-currency assets.

The pilot imposes high financial barriers for market entry. Each exchange participant must have a minimum paid-in capital of 10 trillion VND (approximately $379 million), with at least 65% of the capital coming from institutional investors. Additionally, foreign ownership in any licensed platform is limited to 49%, ensuring that local entities maintain control over the operations. At least 35% of the required capital must also be contributed by financial or technology-related institutions, including commercial banks, securities firms, and fund management companies.

Digital assets issued under the pilot cannot be backed by fiat currencies or securities, effectively excluding common stablecoins and tokenized stocks from the program. This restriction is intended to mitigate systemic risks and align with the government’s cautious stance on asset-backed tokens. Furthermore, enterprises are required to publish detailed prospectuses at least 15 days before launching any digital asset, ensuring transparency for potential investors.

Foreign investors can participate in the program, but only through licensed local service providers and within ownership limits. The policy aims to safeguard national economic security while integrating foreign capital and expertise into the development of Vietnam’s crypto infrastructure. All licensed platforms must adhere to anti-money laundering (AML), counter-terrorism financing (CTF), and data protection regulations, with compliance enforced by the Ministry of Finance, the State Bank of Vietnam, and the Ministry of Public Security.

The pilot program is expected to run until 2030, after which the government will evaluate its effectiveness and decide on potential expansion, amendment, or termination. Analysts suggest that the initiative could position Vietnam as a more trusted and regulated market for digital assets in Southeast Asia, provided it is implemented effectively. However, some experts caution that the high capital and operational requirements may concentrate the market among a small number of large firms, potentially limiting competition and innovation.

By introducing a structured regulatory framework, Vietnam is addressing the risks associated with its previously unregulated crypto environment, where peer-to-peer trading and offshore platforms dominated. The government’s objective is to transition the market from informal to controlled, ensuring consumer protection and reducing illegal activities while enabling safe experimentation with new financial models.