Vietnam’s cryptocurrency market lacks regulation, presenting challenges such as tax difficulties and investor risks. The government plans to create a pilot policy inspired by global models like MiCA and EBRS, balancing innovation with oversight. This includes establishing a lead regulatory authority, setting clear sandbox criteria, and ensuring firms adhere to compliance. A comprehensive legal framework is essential to unlock the sector’s potential for boosting the digital economy and attracting investment.
Vietnam’s cryptocurrency market is currently unregulated, posing significant challenges such as difficulties in tax collection and increased investor vulnerability. The Vietnamese government is initiating a pilot policy to regulate cryptocurrencies, looking towards global models like the Markets in Crypto-Assets Regulation (MiCA) and the European Blockchain Regulatory Sandbox (EBRS) for guidance, striking a balance between innovation and regulatory oversight.
European lawmakers have pioneered regulatory frameworks that foster both innovation and investor protection, evident in initiatives like MiCA—effective June 2024—and EBRS—launched in 2023. The EU facilitates policy experimentation through the EBRS, which pairs blockchain projects with regulators for guidance and does not exempt firms from compliance obligations, ensuring legal adherence during testing phases.
Vietnam is among the most active global crypto markets with a tech-savvy population. Peer-to-peer platforms such as Binance and Remitano dominate trading, but the lack of regulatory clarity remains a concern. Inflows of digital assets reached $120 billion in 2023, representing a notable portion of Vietnam’s GDP, indicating a robust interest in crypto investments.
To develop a sustainable crypto ecosystem, Vietnam needs structured regulations for improved market transparency and investor security. The government has initiated the drafting of the Law on Digital Technology Industry, highlighting commitment to regulation. Lessons from the EU’s MiCA and EBRS suggest designating a lead agency and detailing sandbox project criteria linked to national financial security priorities.
The implementation process of such a sandbox must include thorough assessment and a clear coordination mechanism across regulatory bodies and participating enterprises. Key factors in the sandbox framework consist of supervision levels, exemptions, and post-trial regulations, guiding firms towards eventual formal licensing.
This initiative reflects Vietnam’s prior experiences in transitioning from pilot mechanisms to comprehensive legal frameworks in tech sectors. The government is pursuing a general legal framework for cryptocurrency, advocating a flexible application of EU models tailored to local needs, especially for domestic innovation and startups.
The potential of Vietnam’s cryptocurrency market could significantly enhance its digital economy, necessitating a balanced pilot policy to manage risks and capitalise on opportunities effectively. Legal clarity on digital assets will secure foreign currency influx and foster a safe investment climate, bolstering the dominance of domestic businesses within the emerging market.
