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Vietnam won’t ban cryptocurrencies, but legal framework needed

Putting in place a clear legal framework can help the cryptocurrency sector in Vietnam grow while providing legal certainty for all stakeholders.

Date: 2024-04-15 Author: Łukasz Michałek
Vietnam won’t ban cryptocurrencies, but legal framework needed

A representative of Vietnam’s ministry clarified on Friday that cryptocurrencies are not banned in the country. However, he stressed the importance of establishing a legal framework to regulate them and reduce potential risks.

Cao Dang Vinh, deputy director of the Department of Economic and Civil Law, said there are different interpretations regarding virtual assets, digital currencies and cryptocurrencies. He went on to note the discrepancies in governance in different countries.

The official highlighted concerns about the inherent risks associated with cryptocurrencies, such as misappropriation or money laundering. He also noted that Vietnam does not recognize cryptocurrencies as legal assets, according to Vietnam Investment Review.

According to him, the Ministry of Justice will provide more feedback on regulation once the Ministry of Finance has made concrete proposals.

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Vietnam explores options for regulating cryptocurrencies after FATF audit

Dang Vinh’s comments come about a month after reports that the Ministry of Finance had proposed a potential ban or regulation of virtual assets by May 2025. This was part of an initiative to strengthen the country’s anti-money laundering (AML) efforts.

This 17-point action plan aims to remove Vietnam from the “gray list” maintained by the Financial Action Task Force (FATF). The FATF, an intergovernmental anti-money laundering organization created by the G7, monitors countries’ compliance with AML regulations .

Being placed on the FATF ‘s gray list can negatively affect foreign investment decisions. Essentially, it means an increased risk of money laundering. Vietnamese officials have recognized this concern and have been advocating for cryptocurrency regulations for at least the past two years.

Foreign platforms dominate cryptocurrency transactions in the country

Vietnam ranked third in Chainalytic ‘s global cryptocurrency adoption index for 2023, along with other developing economies such as India, Nigeria, Pakistan and Brazil.

A significant portion of cryptocurrency transactions within the country are conducted on foreign platforms or take place through intermediary transactions.

According to data compiled by the Vietnam Blockchain Association, the total value of cryptocurrencies received in Vietnam reached $91 billion by September 2023. However, the data also shows that illegal transactions accounted for about $956 million of that total.

Vietnam’s burgeoning pool of technology talent and high cryptocurrency adoption rates make it an attractive target for international projects looking to tap the regional market.

Cryptocurrency exchanges in Vietnam are expected to generate revenues in excess of $149 million by the end of 2024, with further growth projected at 10.03% per year over the next four years.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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