Phan Đức Trung, Chairman of the Việt Nam Blockchain Association. — Photo baochinhphu.vn

In an interview with the Government News, Phan Đức Trung, Chairman of the Việt Nam Blockchain Association, expressed confidence that the prompt legalisation of digital asset and cryptocurrency management, as directed by the Prime Minister, will lay the foundation for a robust regulatory framework, accelerating the growth of Việt Nam’s digital economy.

What challenges is Việt Nam currently facing in managing digital currency?

In 2023, the Financial Action Task Force (FATF) placed Việt Nam on its grey list for increased monitoring, issuing recommendations to address shortcomings in the country’s anti-money laundering, counter-terrorism financing and counter-proliferation financing mechanisms.

To be removed from this list, Việt Nam must take decisive action, including the urgent development of a regulatory framework for virtual assets and virtual asset service providers.

Delays in implementing these regulations could drive up financial costs for foreign investment inflows and lead to lost economic opportunities, with long-term consequences.

Việt Nam remains one of the top-ranking countries in the Global Crypto Adoption Index. As of 2024, over 17 million Vietnamese own digital assets, down from 20 million previously but still well above the global average.

Furthermore, the informal and unregulated 'grey economy' in Việt Nam sees significant capital flows through digital assets. Without a clear legal framework, unlocking this hidden financial potential will be difficult, and the broader negative impact of an unchecked shadow economy will persist.

The growing enthusiasm for technology-driven investments and high-yield opportunities has also created an environment ripe for scams, with fraudsters exploiting digital platforms and luring investors into cryptocurrency-related schemes.

Establishing a robust legal framework for digital assets will be key to reducing these risks while supporting the sustainable growth of the sector.

What key areas should the legal framework prioritise? How has the Blockchain Association contributed to its development?

Establishing pilot zones is essential in developing a comprehensive legal framework for digital assets. Cryptocurrency exchanges should be the starting point, with many experts advocating for pilot zones in financial hubs.

Regardless of location, it is crucial to recognise that digital assets exist in an internet-based space, requiring synchronised oversight from regulatory bodies.

The Prime Minister has tasked the Ministry of Finance, in coordination with the State Bank of Vietnam and the Ministry of Science and Technology, with developing legal frameworks and technical standards to ensure security and information safety.

Pilot projects will provide valuable insights, allowing for the refinement and expansion of successful regulatory models. These lessons will shape a stronger, more effective framework that fosters industry growth while ensuring oversight.

Since Việt Nam was placed on FATF’s grey list, the Việt Nam Blockchain Association, in partnership with the Banking Association and research institutes, has organised multiple conferences on virtual assets and virtual asset service providers. The association has also actively engaged with delegations and parliamentary committees to discuss regulatory measures.

In recent years, the association has worked alongside the Ministry of Science and Technology to advance Việt Nam’s national blockchain strategy. On December 22, 2024, General Secretary Tô Lâm signed Resolution No 57-NQ/TW of the Politburo, setting a breakthrough strategy for science, technology, innovation, and digital transformation.

Concurrently, the Prime Minister has directed the Ministry of Finance, with support from the State Bank of Việt Nam, to draft and submit a legal framework for the regulation and development of digital assets and digital currencies by March.

The Blockchain Association is actively collaborating with the Ministry of Public Security, the Ministry of Finance and the State Bank of Vietnam, to provide insights and support for this critical initiative.

What can Việt Nam learn from other countries in this sector?

We must adopt a forward-thinking approach and implement a clear roadmap to turn this vision into reality.

Recently, the administration of President Donald Trump has introduced a series of policies on digital assets that mark a significant shift from previous regulations. Notably, instead of promoting central bank digital currencies (CBDCs), the US has pivoted towards supporting the private sector by fostering stablecoins.

CBDCs are digital currencies issued and regulated by central banks, functioning similarly to traditional cash but existing in digital form. They can be recorded on a blockchain or a similar database.

Stablecoins, by contrast, are cryptocurrencies pegged to stable assets such as fiat currency or precious metals. They are designed to maintain a steady value, helping users mitigate the volatility commonly associated with the crypto market.

Beyond the US, digital asset policies are evolving rapidly, with wide-reaching impacts across Europe and Asia. Việt Nam must closely track these developments and align with key policy shifts in other countries.

Thailand, for example, has built a robust legal framework for digital assets. Since 2018, it has established clear regulations for token offerings, allowing investors to verify whether a token is potentially fraudulent via official platforms.

More recently, Thailand has achieved two major milestones: listing a Bitcoin exchange-traded fund on its stock exchange and launching a pilot programme enabling foreign visitors to make payments using Bitcoin.

What do you expect from the legal framework once it is in place?

The Blockchain Association, as a professional organisation, has faced significant challenges due to the lack of legal recognition for digital assets. A well-defined legal framework would provide formal recognition, bringing Việt Nam in line with global regulatory trends by legitimising digital asset transactions. This includes establishing clear regulations for cryptocurrency exchanges and capital-raising mechanisms through digital asset issuance.

The Politburo’s Resolution No 57 was issued to accelerate progress in science, technology, innovation, and digital transformation. As this resolution is implemented, I believe blockchain will emerge as a key priority.

We expect the forthcoming legal framework to lay a solid foundation for the growth of the digital economy and digital assets. This, in turn, will drive innovation, support the development of technology enterprises, and contribute to Việt Nam’s broader economic advancement. — VNS