Vietnam's New Digital Asset Legislation Paves Way For Crypto Era
By: Eliza Bennet
Vietnam has taken a definitive step toward regulating its digital assets, marking an end to the longstanding regulatory ambiguity that had seen the country’s robust crypto market flourish in a grey zone. The National Assembly, in a remarkable move on June 14, passed the Law on Digital Technology Industry, which for the first time clearly recognizes and regulates cryptocurrencies and other digital assets. The new law is set to come into effect on January 1, 2026, and aims to establish a comprehensive legal framework encompassing licensing regimes for exchanges, anti-money laundering safeguards, and tax regulations tailored to digital currencies.
The legislation divides digital assets into two distinct categories: 'crypto assets,' which includes tokens that have financial functions, and 'virtual assets,' such as in-game tokens or loyalty points. Crypto assets face stringent regulatory requirements including licensing and Know Your Customer (KYC) rules, whereas virtual assets encounter fewer obligations. The introduction of this law positions Vietnam as one of Southeast Asia's most significant regulated crypto markets, potentially driving both local and international investment into the sector.
Vietnam's move is partially influenced by its placement on the Financial Action Task Force (FATF) “grey list” in 2023, owing to deficiencies in the enforcement of AML/CTF measures. The grey listing restricted Vietnam’s capacity for cross-border capital flow and posed a threat to its rapidly expanding fintech ecosystem. To address these concerns, the new legislation incorporates FATF-styled safeguards aiming for a prompt removal from the list. This is a critical step for a country ranked fifth in global crypto adoption, with approximately 17 million crypto holders and holdings valued at around $100 billion, according to industry estimates.
The introduction of this comprehensive legal framework is expected to accelerate the establishment of legal entities and boost hiring in the sector by late 2025. The legal protection this law provides to developers and foreign investors could position Vietnam as a leading crypto hub in the region, comparable to Singapore and Thailand, especially with supportive measures such as R&D tax breaks and blockchain pilot sandboxes. However, the legislation's actual impact will heavily rely on forthcoming sub-decrees which will inform on specific regulations concerning taxation, custodianship, and the handling of decentralized finance platforms.
There are still questions regarding enforcement capacity and the specifics of its execution that need to be addressed. Nevertheless, Vietnam aims to chart a path of regulation over restriction, promoting a regulated market that will play a vital role in strengthening its digital economy, anticipated to reach a gross merchandise value of $45 billion by the end of the year, according to the Google-Temasek e-Conomy report. Vietnam's potential rise as a crypto powerhouse reflects its significant investment in digital innovation, not only boosting its domestic market but also contributing to the global crypto landscape.
