Vietnam Legalizes Crypto, Aims to Exit FATF Gray List by 2026

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 introduces a comprehensive regulatory framework for digital assets, including cryptocurrencies, and is part of Vietnam’s broader effort 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 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 represents a significant shift in how Vietnam manages its digital assets and aims to boost investor confidence by providing a clear legal framework. By regulating its crypto sector, Vietnam seeks to address FATF concerns, position itself as a digital economy hub in Southeast Asia, and attract global venture capitalists and crypto exchanges. The law also includes provisions for pilot sandbox mechanisms for virtual asset products and services, tax exemptions, subsidies, and workforce training programs for blockchain startups. This move is expected to foster innovation and attract global startups and investors, further enhancing Vietnam’s reputation as a transparent and innovation-friendly economy.

Vietnam’s Law on Digital Technology Industry 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 integrates AML and CFT measures into the regulation of crypto exchanges and wallet providers. This move helps Vietnam address FATF concerns about weak customer due diligence and illicit finance. The law also excludes stablecoins from the definition of crypto assets, ensuring consistent oversight and reducing systemic risk. These reforms directly support Vietnam’s goal of exiting the FATF gray list by establishing a transparent, controlled crypto environment that is compliant with global standards.

The law empowers Vietnamese authorities with a clear legal framework to investigate, prosecute, and deter digital asset fraud. Previously, the absence of legal tools hampered enforcement efforts. The law 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 (~$157,300). 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 also facilitates greater cooperation with international regulators, allowing Vietnam to collaborate with foreign authorities on cross-border investigations by aligning its crypto regulations with global standards.

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 for blockchain, AI, and chip design firms, subsidized access to digital campuses and innovation parks, and grants and infrastructure support for R&D in semiconductors and cloud technology. To support this ecosystem, 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, 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. Legalized exchange operations and strong compliance standards reassure 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.