Vietnam has officially exited the crypto “grey zone” with the recent passage of the Law on Digital Technology Industry. This significant development, occurring on June 14, 2023, signifies a critical shift for Vietnam’s burgeoning digital market, acknowledging and regulating digital assets for the first time in one of the world’s most active cryptocurrency landscapes. This comprehensive legislative package will take effect on January 1, 2026, marking the end of years of regulatory ambiguity for the sector.
The new law aims to introduce a licensing regime for cryptocurrency exchanges, implement anti-money laundering (AML) safeguards, and establish tax rules specifically designed for digital assets. By doing so, Vietnam positions itself as Southeast Asia’s latest and potentially largest regulated cryptocurrency market, a move that many view as both progressive and necessary in a rapidly evolving digital landscape.
Two Asset Classes, One National Strategy
Under the new framework, Vietnam categorizes digital assets into two distinct groups: “crypto assets” and “virtual assets.” This separation reflects an effort to strike a balance between fostering innovation and ensuring effective control over the burgeoning market.
Crypto assets, which include tokens with financial utilities, will be subject to stringent licensing requirements, minimum capital mandates, and Know Your Customer (KYC) regulations. On the other hand, virtual assets—such as in-game tokens or loyalty points—will face more relaxed obligations. This nuanced approach is expected to enhance transparency and accountability within the sector while allowing room for innovative applications that don’t necessarily pose significant risks.
The legislation likely mandates that cryptocurrency exchanges must be licensed, maintain a minimum capital base, and operate local offices. Operators without the necessary licenses could face hefty fines, with further sub-decrees on tax, enforcement, and technical compliance expected in the near future.
Regulatory Push Follows FATF Pressure
This groundbreaking legislative action comes on the heels of Vietnam being added to the Financial Action Task Force (FATF) “grey list” in 2023 due to deficiencies in its AML and counter-terrorism financing (CTF) measures. Being on this list restricted cross-border capital flows and posed a threat to Vietnam’s rapidly expanding fintech ecosystem.
By adopting FATF-style safeguards in its new cryptocurrency legislation, Vietnam aims to signal its intent to expedite its delisting from the FATF grey list. The country ranks fifth globally in terms of crypto adoption, with around 17 million holders possessing an estimated $100 billion in digital assets. The prior absence of clear regulations hindered institutional interest and created uncertainty for domestic innovators.
The introduction of regulatory clarity is expected to usher in new capital flows. Local developers may soon enjoy legal protections, foreign exchanges will apply for licenses, and venture capital (VC) firms will feel more secure knowing that their investments are not trapped in a regulatory grey area. The timeline until January 2026 gives stakeholders ample opportunity to prepare for what could be a rush of legal entity registrations and employment increases by the end of 2025.
A New Hub in the Making?
Vietnam’s ambitions extend beyond mere compliance. The new law also aims to promote the growth of the country’s digital economy, set to reach an impressive $45 billion in gross merchandise value (GMV) by the end of the year, according to the Google-Temasek e-Conomy report. To catalyze this growth, the legislation offers various incentives including tax breaks for research and development, pilot projects for blockchain technology, and subsidies for skilled tech labor.
Several analysts believe that Vietnam has the potential to join Singapore and Thailand as a pivotal regional crypto hub, especially as other ASEAN nations continue to lag behind in terms of regulatory clarity. With a young, tech-savvy demographic and a robust developer community, Vietnam’s entry into a regulated cryptocurrency market could reshape the regional Web3 landscape.
However, key questions remain. While the law is broad in scope, there is a lack of specifics regarding enforcement and implementation. The sub-decrees set to be released in the next 180 days will clarify how taxes will be imposed, how custody of digital assets will be handled, and how decentralized finance (DeFi) platforms and stablecoins will be regarded under the law. As financial authorities work to bolster their internal expertise, concerns about enforcement capacity also loom large.
Still, the message from Hanoi is clear: a commitment to regulation, rather than restriction, will guide the future of cryptocurrency in Vietnam.
Timeline: How Vietnam Got Here
- March 1, 2025: A Prime Ministerial Directive orders the finalization of the crypto framework.
- May 9, 2025: The National Assembly begins its final debate on the legislation.
- June 14, 2025: The Law on Digital Technology Industry is passed in the concluding session of the National Assembly.
- January 1, 2026: The law officially comes into effect.
By replacing uncertainty with a robust regulatory architecture, Vietnam is betting that a licensed and rule-bound cryptocurrency industry will not only become a cornerstone of its expanding digital economy but also attract significant global investment. As the world watches, Vietnam sets a hopeful precedent for balancing innovation with regulation in the ever-evolving crypto landscape.
