Vietnam Legalizes Crypto Assets to Boost Digital Economy and FATF Standing

Vietnam has taken a significant step towards embracing the digital economy by legalizing crypto assets under a new Digital Technology Industry law, effective from January 1, 2026. This landmark legislation introduces a regulatory framework that distinguishes between virtual assets and crypto assets, empowering the government to oversee their activities. The move is anticipated to enhance Vietnam’s standing with the Financial Action Task Force (FATF), attract crypto investment, and foster a regulated Web3 ecosystem.

The new law categorizes digital assets into two main groups: virtual assets and crypto assets. Virtual assets are defined as digital properties used for exchange or investment, excluding digital fiat, securities, or financial instruments governed by existing laws. Crypto assets, on the other hand, are digital assets validated through encryption or similar digital technologies during their creation, issuance, storage, and transfer. This categorization aims to provide clarity after years of regulatory confusion, which previously posed compliance challenges for local startups and foreign investors.

The law establishes a legal framework for the Vietnamese government to set specific business conditions, licensing requirements, and governance models for crypto-related activities. This includes standards for exchanges, wallet providers, and token issuers. The Ministry of Science and Technology will lead the enforcement of the law, collaborating with the Ministry of Finance and the State Bank of Vietnam to ensure digital assets are managed in accordance with applicable international standards.

The enactment of this law comes amid growing pressure from international watchdogs, as Vietnam has been on the FATF’s “gray list” since 2023 due to shortcomings in its anti-money laundering (AML) framework. The new legal framework includes strict provisions for AML and Combating the Financing of Terrorism (CFT), cybersecurity protocols, and transaction oversight mechanisms aligned with global standards. These measures are expected to improve Vietnam’s FATF standing, potentially leading to its removal from the gray list and enhancing foreign investor confidence.

Unlike nations such as El Salvador, where Bitcoin has been made a legal tender, Vietnam is opting for a cautious, infrastructure-first model. This approach aims to build a healthy digital asset environment while mitigating speculative risk, similar to successful regulatory regimes in Singapore, South Korea, and the UAE. The government is also expected to pilot regulatory sandboxes for digital asset innovation, allowing new crypto projects to test products in a controlled environment without facing immediate compliance burdens.

Vietnam has one of the world’s most active crypto communities, with a youthful, tech-savvy population and high mobile penetration. However, the absence of legal clarity has made it challenging for founders and investors to grow operations. This new law is expected to open up venture capital and institutional money into local blockchain startups, promote Web3 talent retention, and draw global crypto players keen to enter Southeast Asia through regulated markets.

Industry observers are looking forward to further industry regulation, including decrees on how licenses for exchanges and custodians will be issued, the creation of a central VASP registry and licensing authority, guidance on taxation and crypto-related capital gains transactions, and collaboration with banks and payment service providers on transparent rules for on- and off-ramp services. A transition period is anticipated in 2025, where crypto businesses will have time to adapt before full enforcement is implemented by January 1, 2026.

The campaign for recognition also comes after multiple cryptocurrency-related scams in Vietnam, which highlighted the necessity for enhanced monitoring. In early 2025, authorities arrested a group behind BitMiner, a fake Dubai-based mining scheme that scammed over 200 victims out of $157,000 USD. Another operation, Million Smiles, used spiritual connections and sham “ancestral treasures” to scam 400 people and 100 businesses out of more than $1.1 million worth of a token called QFS. These incidents underscore the importance of the new regulatory framework in protecting investors and fostering a secure digital asset environment.