Around 20 million Vietnamese possess virtual assets, and the total value of cryptos traded in the local market is projected to reach up to US$120 billion last year.

These are two of the most notable numbers presented at the Vietnam Blockchain Association's workshop on a legal framework to regulate virtual assets and virtual asset service providers, which took place in Ho Chi Minh City on June 5.

These figures are referenced from a Chainalysis analysis in the U.S., which shows that the inflow of virtual assets into the Vietnamese crypto market totaled $120 billion in January-July 2023. 

At the same time, Vietnam received $25 billion in foreign direct investment (FDI), equivalent to one-fifth of the inflow of virtual assets.

The inflow of virtual assets into Vietnam amounted to $100 billion between 2021 and 2022.

Approximately 60 percent of all cryptocurrencies in Vietnam have been exchanged on the Centralized Exchange (CEX). 

According to data released by Triple A, a cryptocurrency payment company licensed by the Monetary Authority of Singapore, around 20 percent of the Vietnamese population own virtual assets. By sheer numbers, Vietnamese virtual asset owners rank third in the world.

Chainalysis estimated that global investors in virtual assets made a total profit of $37.6 billion in 2023, Vietnam placing third with a margin of $1.2 billion.

However, owing to the absence of an official legal framework in Vietnam to date, all types of virtual assets, such as bitcoin, have been left to the underground economy, where economic activities are not reported to regular financial institutions.

At the workshop, Tran Viet Hung, former Deputy Chief of the Office of the Party Central Committee and senior advisor to the Vietnam Blockchain Association, proposed establishing an official legal framework for managing virtual assets.

According to Hung, this approach would help transition the value of virtual assets and service providers from the underground economy to the legal sector.

This also helps defend investors' rights, strengthen the tax system, prevent money laundering, and combat terrorism.

According to this expert, a strict virtual asset management policy can also help firms deal with capital issues.

While traditional fundraising methods such as equities, banks, and bonds are struggling, the value of virtual assets streaming into Vietnam is expected to be five times higher than FDI.

"The Vietnam Blockchain Association hopes that in a year, discussions about virtual assets and blockchain technology will move beyond the underground economy and the rise of bitcoin prices. Instead, we'll focus on the significant contributions that virtual assets and virtual asset service providers make to our economy," Hung continued.

Vietnam has been added to the grey list for money laundering

The Financial Action Task Force (FATF), an international financial crime monitor, added Vietnam to its watch list in June 2023. 

In February 2024, Prime Minister Pham Minh Chinh approved a national plan to fulfill the Vietnamese government's commitment to combating money laundering.

The plan includes 17 activities with the goal of removing Vietnam from the FATF's grey list.

A country risks losing an average of 7.8 percent of its GDP, among other national concerns, when being put on that grey list, according to the International Monetary Fund.

The government has also mandated the completion of a legal framework to prohibit or regulate virtual assets and virtual asset service providers.

Linked entities are expected to present evidence-based approaches for implementing this framework by May 2025.

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