Scientific workshop with the theme "State management of crypto assets: Theoretical and practical issues in Vietnam". Photo: HD

On August 29, 2024, the National Institute of Finance coordinated with the Academy of Finance to organize a scientific workshop with the theme "State management of crypto assets: Theoretical and practical issues in Vietnam".

Up to US$120 billion in cryptocurrencies entered Vietnam

According to Dr. Nguyen Nhu Quynh, Director of the Institute for Finance, crypto assets are an inevitable development trend, transactions related to crypto assets still take place in the market and are constantly developing.

According to experts, in Vietnam, although the cryptocurrency ownership rate is at very high level, there are still no specific legal regulations related to this field. The State Bank does not recognize cryptocurrency as a means of payment, the Ministry of Justice does not consider it a type of asset, and the Ministry of Industry and Trade does not consider it a type of commodity.

Meanwhile, a report by the Chainalysis (USA) shows that in 12 months (as of July 2023), the flow of crypto assets into Vietnam reached US$120 billion, about 3-4 times higher than the flow of foreign direct investment into Vietnam and increasing by 20% compared to the 2021-2022 period (about US$100 billion).

According to Mr. Phan Duc Trung, Permanent Vice President of the Vietnam Blockchain Association, it is forecasted that by 2030, the world will have US$16,000 billion USD in traditional assets encrypted. Vietnam currently ranks 3rd in the global cryptocurrency adoption index and rank 7th in the world of cryptocurrency ownership with 17.4% of the population adopting crypto and is among the top 30 economies with the highest crypto ownership rate.

Mr. Trung added that due to the large profits, crowdfunding from crypto assets has been fraudulent. Many units with unknown information have organized closed seminars, taken advantage of images to attract capital mobilization from the community. Reports from users show that they have been scammed through sending and depositing money on trading platforms and wallets with unknown information.

Dr. Nguyen Van Cuong, Director of the Institute of Legal Science and Strategy under the Ministry of Justice) also said that, whether we like it or not, we have to admit that there is a segment of the Vietnamese population that is holding and conducting transactions related to crypto assets, including transactions related to bitcoin. However, conducting transactions related to crypto assets for money laundering purposes is a burning issue in law enforcement practice in many countries today.

Need to be cautious, ensure balance of many goals

Given the above situation, according to Dr. Nguyen Nhu Quynh, Vietnam needs to have a suitable management plan, including quickly completing regulations on managing virtual assets and crypto assets in accordance with the anti-money laundering standards of the Financial Action Task Force to remove Vietnam from the Grey List according to Decision No. 194/QD-TTg dated February 23, 2024 of the Prime Minister.

"Building a legal framework to strongly promote the development and application of Blockchain technology, digital assets, management of virtual assets, virtual currencies, crypto assets, and crypto currencies is very necessary, but state management measures for these issues need to be cautious, ensure a balance between the goals of encouraging innovation and protecting the interests of organizations and individuals in society", Dr. Nguyen Nhu Quynh emphasized.

Sharing more, economic expert Dr. Can Van Luc believes that instead of choosing to do nothing or prohibit, most developed countries have built legal regulations to regulate and manage the crypto-asset market.

Accordingly, many countries have begun to develop a legal framework for crypto-asset management to put crypto-assets under management and supervision instead of being unrecognized or banned as before. Most countries in the G20 group (except China) tend to recognize crypto-assets, license some types of crypto-asset services, license crypto-asset exchanges, and tax crypto-asset transactions.

International financial organizations such as the Financial Stability Board (FSB), the International Organization of Securities Commissions (IOSCO), the Basel Committee on Banking Supervision, etc. have also issued guidelines, good practices, and recommendations for state management agencies on this issue.

Dr. Can Van Luc shared that the issuance of legal regulations related to the management of crypto assets also contributes significantly to protecting investors, enhancing the ability to collect taxes on crypto asset transactions, improving the ability to control money laundering activities, minimizing the risk of terrorist financing, and better managing capital flows out of the country.

Representing the research group on state management of crypto assets of the Academy of Finance, Dr. Nguyen Thi Thuy Dung proposed that the Government can choose to manage and monitor crypto assets rather than completely ban them, at the same time, unifies the concept of "crypto assets" in legal documents; manage activities related to crypto assets according to a risk approach, prioritizing the management of custody activities.

To protect the rights of the people, the Government also needs to raise awareness, increase information provision, give timely warnings, and build a synchronous protection mechanism stipulated in the consumer protection law and future laws on crypto assets.