Consultations have shown that virtual asset bans could be one direction for the government, photo Shutterstock

Experts and businesses operating in decentralised finance are actively contributing their views to support the Ministry of Finance in building and completing the legal system on virtual asset management by May 2025.

At the conference on building a legal framework for virtual asset management held by the Vietnam Blockchain Association (VBA) last week, vice president Nguyen Hung said, “The results of consultation with experts and relevant parties conducted by the VBA show that 60 per cent of opinions are leaning towards the option of banning virtual assets (VAs), while the remaining 40 per cent are neutral.”

Do Ngoc Quynh, general secretary of Vietnam Bond Market Association, said that Vietnam needs to make strategic choices regarding the current issue of virtual asset management, instead of trying to avoid it.

“If properly utilised, capital and resources from virtual assets will provide good support for the economy,” Quynh said. “But the important issue is how to manage it to achieve the best benefits for the country, while limiting negative impacts.”

Quynh added that the views of state management agencies in many countries on VA management are currently positive, but most of them are confused when it comes to appropriate behaviour because it is related to national sovereignty and currency.

“The national monetary policy in the early stages of opening up did not allow any foreign currency to be allowed for payment. But Vietnam later also issued a policy allowing people to keep USD and deposit it in banks, but not use it for payments in the economy. If the same thing were applied to VAs now, would it be okay?” he asked.

Remitano, a virtual asset service provider (VASP), hopes that Vietnam will soon issue a suitable legal system to create improvements and policy incentives for providers with many years of experience and reputation in the market.

“Improving the framework in the direction of creating positive conditions for VASPs to operate and develop will encourage foreign businesses to invest in Vietnam,” a Remitano representative said.

The total value on the global scale of virtual assets is expected to account for 10 per cent of global GDP, up to $16 trillion by 2030, according to the World Economic Forum.

In Vietnam, data from the US Department of Justice in 2022 shows that Vietnamese people profited by up to $238 million from cryptocurrency. The total value of cryptocurrencies entering the country from October 2021 to October 2022 amounted to more than $100 billion, according to statistics from Chainalysis.

Although there is no legal framework, virtual currency trading and trading activities in Vietnam are quite vibrant through international exchanges with popular digital currencies such as Bitcoin and Ethereum.

Tran Huyen Dinh, CEO of AlphaTrue JSC, said that by May 2023, the total transaction value of Vietnamese users on a top virtual asset exchange alone was about $20 billion each month.

“The over-the-counter market for virtual assets in Vietnam has a scale of no less than $100 million every day. These are statistics from mid-2023, when the value of Bitcoin was about $30,000, while now the price has increased nearly 40 per cent,” Dinh said.

Statistics from US group Crypto Crunch App also show that Vietnam has nearly 26 million virtual currency owners, ranking third in the world, just behind India and the US.

However, being in the top 20 countries with a high money laundering risk index, as assessed by the Basel AML Index 2023, Vietnam is in the process of researching and building a legal corridor to ban or regulate money laundering for VASPs, expected to be completed in May next year.

Several markets have crafted regulations to manage the cryptocurrency market and VAs over the years. In the US, cryptocurrency was first mentioned in the Infrastructure Investment and Jobs Act signed into law by President Joe Biden in 2021. A cryptocurrency market management law was announced by the European Parliament in May 2023 and is expected to take effect at the end of 2024. In mid-2022, the Hong Kong Securities and Futures Commission announced a mandatory licensing regime for platforms providing cryptocurrency services. Thailand also introduced regulations with its Digital Asset Decree, effective from 2018.