Vietnam’s Embrace of Digital Assets
The year has witnessed a significant surge in the adoption of cryptocurrencies, as numerous countries begin to recognize the benefits of digital assets, affirm their legality, and explore their practical applications. In a notable development, Vietnam’s National Assembly has officially approved the Law on Digital Technology Industry, which marks a pivotal moment in the legalization of cryptocurrency assets within the nation.
Regulatory Framework for Digital Assets in Vietnam
With the enactment of the Digital Technology Law, Vietnam has categorized digital assets as “virtual assets” or “crypto assets.” This classification specifically excludes digital representations of traditional currencies, securities, or other financial tools. According to the law, crypto assets pertain to encrypted digital tokens that facilitate the transfer and storage of value, while virtual assets encompass a wider range of digital representations that may hold utility in virtual settings. Before the law’s implementation in 2006, there was a lack of clear regulations surrounding the business activities, licensing processes, and conditions for these crypto and virtual asset categories. A spokesperson from the National Assembly remarked that the law aims to safeguard users, enhance transparency, and lay down a legal foundation for a responsible digital economy in Vietnam.
Commitment to Cybersecurity and Global Standards
Cybersecurity is emphasized as a fundamental aspect of the Digital Technology Industry Law. Organizations engaged with digital and crypto assets will be mandated to establish protective systems against unauthorized access, data breaches, and fraudulent activities. These stipulations align with Vietnam’s obligations to uphold global standards for data and financial integrity. Additionally, the new legislation reflects Vietnam’s aim to exit the Financial Action Task Force (FATF) “gray list,” a status it has held since 2023. Implementing more stringent regulations on digital assets and establishing transparent oversight is essential for meeting the FATF’s criteria for removal. Authorities believe that harmonizing digital asset governance with international standards will enhance investor trust and facilitate legitimate cross-border digital transactions.
NDAChain and the National Identity Initiative
The Ministry of Public Security has launched NDAChain, a national blockchain platform designed to facilitate secure and decentralized applications. Utilizing a Permissioned Blockchain model along with a Proof of Authority (PoA) consensus mechanism, NDAChain enables rapid and secure data transactions while employing Zero-Knowledge Proof (ZKP) technology to ensure user privacy during identity verification. Complementing this, the Decentralized Identifier (NDA DID) system empowers individuals and organizations to manage their identity information independently, adhering to the Decentralized Identity model. This initiative aims to combat fraud, safeguard privacy, and bolster reliable digital services, playing a vital role in Vietnam’s broader digital transformation by allowing secure interactions without dependence on centralized verification entities.
Encouraging Digital Innovation and Skill Development
According to updates regarding the recent legalization of crypto assets in Vietnam, businesses in essential digital technology sectors will be encouraged to enhance their innovation efforts. Incentives such as tax exemptions, land use benefits, and funding for research and development will be provided. Companies engaged in blockchain applications and the infrastructure of digital assets are among those eligible for these benefits. To support these initiatives, local governments are expected to implement funding and training programs aimed at cultivating a skilled workforce. Educational institutions will promote a national curriculum focused on digital technology and cybersecurity expertise. These changes are anticipated to equip young professionals with the necessary skills to thrive in the expanding digital sector. The Ministry of Information and Communications has stated that prioritizing education and training is crucial for fostering long-term growth in digital skills and ensuring industry sustainability.
Vietnam Aspires to be a Regional Digital Economy Leader
With the Digital Technology Industry Law now in effect, Vietnam seeks to position itself as a prime destination in Southeast Asia for digital asset enterprises. The law’s passage alleviates previous uncertainties surrounding digital asset business practices and establishes a stable legal framework conducive to innovation and investment. By legalizing crypto assets and instituting regulatory oversight, Vietnam is poised to attract significant foreign investment, which will bolster the growth of local digital startups. This regulatory framework also aligns with the country’s ongoing objective to develop its sovereign digital infrastructure, adhering to both national and international standards.
