Vietnam Not Banning Crypto, But Legal Framework Needed: Ministry Rep

CryptoNews.com

2024-04-14 21:25:03

Shalini Nagarajan

Last updated:

April 15, 2024 01:25 EDT | 1 min read

A Vietnam ministry representative clarified Friday that crypto is not prohibited within the country. However, he emphasized the importance of establishing a legal framework to regulate them and mitigate potential risks.

Cao Dang Vinh, deputy director of the economic and civil legislation department, said there are varying interpretations concerning virtual assets, digital currencies, and cryptocurrencies. He further noted a disparity in management among different countries.

The official highlighted concerns regarding the inherent risks associated with crypto, such as misappropriation or money laundering. He also noted Vietnam’s non-recognition of crypto as a legal asset, the Vietnam Investment Review reported.

According to him, the Ministry of Justice will provide more feedback on regulations once the finance ministry presents concrete proposals.

Vietnam Explores Crypto Regulation Options Following FATF Scrutiny

Dang Vinh’s comments come about a month after reports that the finance ministry proposed a potential prohibition or regulation of virtual assets by May 2025. This was part of an initiative to strengthen the country’s anti-money laundering (AML) efforts.

This 17-point action plan aims to remove Vietnam from the “gray list” the Financial Action Task Force (FATF) maintains. The FATF, an intergovernmental anti-money laundering organization established by the G7, monitors countries’ compliance with AML regulations.

Inclusion on the FATF gray list can negatively impact foreign investment decisions. It essentially signifies heightened money laundering risks. Vietnam’s officials have recognized this concern and have been advocating for crypto regulations for at least the past two years.

Foreign Platforms Dominate Vietnam’s Crypto Transactions

Vietnam ranked third in Chainalysis’s 2023 global crypto adoption index, along with other developing economies such as India, Nigeria, Pakistan, and Brazil.

A significant portion of crypto transactions within the country are conducted on foreign platforms or facilitated through intermediary transactions.

According to data compiled by the Vietnam Blockchain Association, the total value of crypto received in Vietnam approached $91b by Sept. 2023. However, the data also indicates that illegal transactions accounted for roughly $956m of this total.

Vietnam’s flourishing pool of tech talent and its high crypto adoption rates make it a compelling destination for international projects seeking to capitalize on the regional market.

Crypto exchanges in Vietnam are expected to generate revenue over $149m by the end of 2024, with a further growth forecast of 10.03% annually over the next four.

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