Legal framework for digital currencies must be submitted in March: Vietnam PM

Prime Minister Pham Minh Chinh has asked the Ministry of Finance and the State Bank of Vietnam to submit a legal framework for the management and development of digital assets and digital currencies within March.

The assignment is mentioned in a directive dated March 1 on key tasks and solutions to promote economic growth to “at least 8%” and disbursement of public investment capital.

Currently, buying, selling and using virtual currencies in Vietnam do not have any legal basis. It is worth noting that in Vietnam, although not officially recognized, cryptocurrency transactions have still taken place.

Previously, in February, Vietnam’s Party chief To Lam had emphasized the need to study the application of a sandbox mechanism to establish an exchange for digital assets.

During a working session with the Party Central Committee’s Commission for Policies and Strategies on economic growth goals, Lam said cryptocurrencies such as Bitcoin and Ethereum are considered popular virtual assets.

However, Vietnam currently lacks a specific definition for virtual currencies and assets, he stated, noting that the current regulations only mention digital money, which is pegged to fiat currency and exists in the form of prepaid bank cards or e-wallets.

The Party General Secterary agreed with the commission’s proposal to manage these digital currencies as a type of virtual asset to prevent negative impacts on the economy and society while mobilizing resources and value for the country.

According to Lam, the National Assembly – the country’s legislature and government agencies need to quickly institutionalize and specify regulations to manage this field. They should study the application of a sandbox mechanism to establish a digital asset exchange.

“Policies need to be in place to ensure that Vietnam does not fall behind, miss opportunities, or create a gap with new financial models and modern trading methods,” he stressed.

Experts said the lack of a legal framework for digital assets has led many businesses to register in Singapore or the U.S. and then operate in Vietnam, causing losses of competitive advantages and tax revenue. For users, the lack of transparency leads to risks in transactions.

Data released by the Vietnam Blockchain Association in August 2024 showed that between 2021-2022, Vietnam ranked in the top three globally for the percentage of the population owning digital assets (21% of total population), following the UAE and the U.S.

Vietnam ranked third in the world for cryptocurrency gains in 2023, only after the U.S. and the UK, with nearly $1.2 billion, according to U.S. blockchain analysis firm Chainalysis.

The country was one of five Asian markets in the top 10 countries for cryptocurrency gains last year, besides China, Indonesia, India, and South Korea, it added.