Vietnam’s Prime Minister, Pham Minh Chinh, has initiated efforts to position Vietnam as a significant player in the crypto market, especially within Southeast Asia. The Prime Minister is proposing a legal framework for digital assets that is expected to take effect this month.

The intention behind this move is to regulate the ownership, trading, and usage of cryptocurrencies, addressing the existing uncertainties regarding Vietnam’s stance on digital assets. By establishing clear regulations for investors, businesses, and financial institutions, Vietnam aims to create a hospitable environment for crypto adoption and innovation.

NEW: 🇻🇳 Vietnam’s PM Pham Minh Chinh orders Finance Ministry and central bank to propose digital asset regulations by March. Source

Post Revolution: Vietnam Goes Crypto and Digital

Traditionally, Vietnam has proceeded with caution in its investment and economic expansion, influenced by its centrally planned economy. However, since adopting the Đổi Mới policy in the late 1980s, the country has shifted towards a market-oriented economy, first focusing on agriculture and small-scale industries.

Over time, Vietnam has welcomed foreign direct investment, particularly in manufacturing and the digital sector. By the early 2000s, multinational corporations such as Samsung and Intel established significant operations in the country.

Currently, Vietnam’s rapid urbanization, increasing digital literacy, and substantial cryptocurrency adoption rates reflect its development. Surveys show that a significant portion of the population employs crypto for remittances, investments, and transactions.

Vietnam is recognized as a key developing economic contender, facilitating the proposed digital asset framework. Drawing on regulatory examples from Singapore and Thailand, it aims to govern crypto exchanges, wallet service providers, and token issuers.

This regulatory framework will mitigate risks and lower remittance transaction costs to attract tech startups, allowing Vietnam to meet local demands while adhering to global standards.

Vietnam to Lead Crypto Adoption in Southeast Asia

The impact of Vietnam’s legal framework for cryptocurrencies on the international market is expected to be substantial. It will foster the legitimization of cryptocurrencies in Southeast Asia, a region known for its active crypto operations. By formalizing these regulations, Vietnam aspires to set a benchmark for neighboring countries.

This development could drive regional policy alignment, enhancing investor confidence and liquidity while increasing trading volumes relevant to projects connecting stocks and cryptocurrencies.

Vietnam’s commitment to integrating traditional finance with digital assets aligns with gaming ecosystems like Axie Infinity, a notable Vietnamese project that reached an all-time high market capitalization of $10 billion.

Vietnam is now recognized as one of the world’s leading capitals for cryptocurrency adoption, pioneering in overall and DeFi adoption.

Vietnam’s successful digital framework could also draw foreign investments, transforming the country into a blockchain innovation hub and attracting capital from established crypto markets like Singapore and Dubai. This strategic move aims to elevate Vietnam’s global economic stature and reduce unregulated activities in the region, thus enhancing market stability.

As cryptocurrency becomes more widely adopted in the country, it is anticipated to streamline cross-border transactions, decrease dependence on conventional banking systems, and reduce transaction costs, pushing Vietnam’s GDP growth beyond the estimated 5.1% annually. Moving forward with the digital legal framework, under the leadership of Pham Minh Chinh, is crucial for both Vietnam and the global cryptocurrency landscape.

“We must develop our economy to stand on our own feet, but also learn from and cooperate with the world to build a prosperous nation for the benefit of all people.” – Ho Chi Minh