The article by Mr. Dinh Hong Ky was published in the “Perspective” section of VnExpress on May 31, 2025.
In 2024, a Vietnamese blockchain startup had to relocate its headquarters to Singapore just to be considered “legal.”
Although founded by Vietnamese engineers graduated from MIT and operating in compliance with international standards, the company could not register its business domestically due to the lack of a legal framework for cryptocurrencies. This is not an isolated case but part of a wave of “offshoring” to achieve legalization, influenced by the old mindset: “If you can’t control it, ban it.”
Vietnam is among the countries with the highest cryptocurrency adoption rates worldwide. According to Chainalysis, from 2021 to 2023, Vietnam consistently ranked in the global top 5 for crypto adoption, surpassing many developed countries. Millions of Vietnamese hold digital assets like Bitcoin, Ethereum, and more. However, the legal framework for digital assets remains a significant gap: neither prohibited nor fully recognized, leaving investors and startups operating in a gray area.
Due to the lack of legal framework, authorities must use existing regulations to curb risks. The State Bank of Vietnam has repeatedly warned citizens against using cryptocurrencies in transactions. Transactions still occur, but in the shadows, without consumer protection mechanisms, no taxation, and with high risks.
As of mid-2025, Vietnam has no official regulation recognizing cryptocurrencies as assets, means of payment, or securities. This leads to multiple consequences: investors who lose money cannot sue; startups cannot open bank accounts; the tax authorities cannot collect any taxes from transactions worth billions of dollars.
Meanwhile, countries with similar contexts have advanced much further. Singapore is a prime example. Facing the same dilemma — how to attract innovation while controlling risks — Singapore chose to build an early legal framework. In 2019, it enacted the Payment Services Act, licensing crypto exchanges to operate under a sandbox regime, requiring firms to comply with anti-money laundering (AML) standards, protect customers, and securely custody digital assets.
Thanks to this strategy, Singapore has become Asia’s leading digital asset hub, attracting major players like Binance, Coinbase, and Ripple to set up offices there. Local enterprises also gain greater access to capital and international cooperation. More importantly, people and investors are protected by a transparent legal framework.
Another example is the UAE. Since 2022, Dubai has established the Virtual Assets Regulatory Authority (VARA) to manage digital assets, attracting hundreds of global crypto companies. The government does not ban crypto but creates a strict regulatory framework that allows development without loosening supervision.
In Brazil — the seventh-largest crypto market globally — the Parliament passed a law at the end of 2022 recognizing Bitcoin and digital assets as financial assets. Brazil’s Securities Commission (CVM) issued guidelines for token issuers and allowed the central bank to pilot a central bank digital currency (CBDC). As a result, Brazil has not only controlled capital flows but become a fintech investment destination in Latin America.
Even closed economies like China — which banned crypto in 2021 — cannot deny blockchain’s role. Beijing has begun rolling out the digital yuan (e-CNY) to control domestic currency circulation. Meanwhile, regions like Hong Kong are permitted to pilot digital assets under separate regulations to stay ahead of global trends.
Back to Vietnam, continuing to avoid the issue will not enable sustainable market development. Without clear legal frameworks, crypto activities will remain uncontrolled. A greater paradox is that Vietnamese-founded blockchain projects — Kyber Network, Coin98, TomoChain — must register abroad to raise funds, while most engineers and products remain in Vietnam. Other countries reap taxes, reputation, and capital; Vietnam only serves as a “workshop” for innovation.
What is the solution for Vietnam?
First, it must soon enact an official legal framework recognizing digital assets as legitimate property, traded under state supervision. At the same time, Vietnam can adopt sandbox models like Singapore and the UK — allowing enterprises to test products under limited regulatory control in time and scope.
Second, it should differentiate types of digital assets. Cryptocurrencies like Bitcoin and Ethereum differ from security tokens, NFTs, or stablecoins. Each requires specialized laws. Start with the easiest to regulate, such as stablecoins pegged to fiat currency, as a pilot.
Third, develop deep regulatory capacity. Currently, few government agencies have staff with sufficient blockchain or crypto expertise. Training officials, cooperating with research institutes and universities, and even inviting international experts are necessary steps for effective regulation.
Fourth, link regulation with transparency and investor protection. Rules must require exchanges to disclose risks, custody assets properly, and be liable for losses. Risks should not be pushed onto the public as they are now, where all damages are borne individually.
Cryptocurrency is not a threat but a challenge — and an opportunity. If Vietnam overcomes its fear of the new, it can not only become a crypto user but also have the chance to lead the game.
