Vietnam's Crypto Regulation: From Regulatory Gray Zone to Controlled Experimentation
The Emerging Transformation of Vietnam's Crypto Market
This report by Tiger Research examines Vietnam's cryptocurrency regulatory shift from gray zone to controlled experimentation and its business implications as the country develops its crypto sandbox by mid-2026.
TL;DR
Vietnam is actively transitioning from its observational cryptocurrency policy. The government plans to implement a cryptocurrency sandbox by mid-2026 while developing a systematic regulatory framework.
Companies that proactively participate before the establishment of regulatory frameworks can secure leading positions in Vietnam's institutionalized cryptocurrency market.
Recent market analysis indicates that regulatory compliance, operational transparency, and rapid adaptation capabilities will surpass technological innovation as key success factors in Vietnam's future cryptocurrency market.
1. The Duality of Vietnam's Cryptocurrency Market: Enthusiastic Adoption and Regulatory Uncertainty
Vietnam has emerged as one of the most dynamic cryptocurrency markets globally. The country has consistently ranked in the top five of Chainalysis' Global Crypto Adoption Index since 2021. Over 21% of Vietnam's adult population owns or has used cryptocurrencies. Annual cryptocurrency inflows to the Vietnamese market exceed $100 billion.
Young generations dominate the Vietnamese cryptocurrency market. Users participate through multiple channels including global exchanges for active trading, self-custody wallets for P2P transactions, DeFi protocols, and GameFi platforms.
Vietnam's regulatory environment sharply contrasts with the market's enthusiastic interest. The Vietnamese government does not recognize cryptocurrencies as legal tender. The State Bank of Vietnam (SBV) officially prohibits cryptocurrency use as payment methods. Individual cryptocurrency ownership and trading remain legally permitted, creating an ambiguous market environment.
Vietnam lacks regulatory frameworks for cryptocurrency businesses. The absence of licensing systems for exchanges, custody services, and stablecoin operations creates obstacles for industry development.
This regulatory gap led to the Financial Action Task Force (FATF) placing Vietnam on its grey list" This placement weakens Vietnam's economic credibility and produces negative impacts. Cryptocurrency companies relocate to countries with clear regulatory frameworks like Singapore. This migration raises concerns about talent and investment opportunity outflows weakening national competitiveness.
This report analyzes Vietnam's cryptocurrency industry regulations and examines various regulatory bodies' positions. It also explores how recent cryptocurrency regulatory initiatives announced by the Vietnamese government will transform the market.
2. Fragmented Oversight: Vietnam’s Crypto Regulatory Landscape
Vietnam's regulatory environment reveals varying positions among regulatory agencies based on their interests and priorities. Understanding each regulatory body's role and stance clearly becomes essential to comprehend Vietnam's cryptocurrency industry.
2.1 State Bank of Vietnam (SBV): Maintaining Financial System Stability
The SBV maintains the most conservative and cautious position among Vietnamese regulatory agencies. The SBV prohibited cryptocurrency use as a payment method through an official document (5747/NHNN-PC) in 2017. The SBV assesses cryptocurrencies as potential risk factors that could significantly impact national financial system stability.
The SBV recognizes blockchain technology's potential applications. The SBV explores national financial system optimization through a Central Bank Digital Currency (CBDC) pilot project from 2021 to 2025. This focus remains on limited applications within a government-controlled environment rather than opening the cryptocurrency market. The SBV's conservative stance restricts various cryptocurrency applications while perpetuating regulatory uncertainty.
2.2 Ministry of Finance (MoF): Opening Controlled Paths for Innovation
The MoF demonstrates the most proactive stance toward the cryptocurrency industry, contrasting with the SBV's conservative position. The MoF recently announced plans to launch a cryptocurrency sandbox pilot program in collaboration with global exchanges like Bybit. Industry experts consider this a significant first step toward developing a regulatory framework for cryptocurrencies in Vietnam.
The MoF operates a dedicated working group on crypto since 2021. This group focuses on improving tax reporting systems, ensuring transparency of fund sources, and establishing standards for cryptocurrency-linked investment products. Their primary task involves effectively managing financial flows and minimizing tax evasion risks while maintaining cryptocurrency innovation. The MoF actively supports the development of official licensing systems for cryptocurrency exchanges, custody services, and stablecoin issuers.
The MoF aims to foster a healthy cryptocurrency market through this approach. It provides opportunities for compliant companies while demanding strict adherence to tax, financial disclosure, and anti-money laundering (AML) standards.
2.3 State Securities Commission (SSC): Safeguarding Market Integrity
The SSC oversees Vietnam's capital markets and maintains a very cautious attitude toward tokenized assets. The commission focuses primarily on clarifying whether certain digital assets used for investment purposes should qualify as securities and require regulatory oversight.
The SSC worries about "hidden securities issuance" when cryptocurrency projects raise capital through ICOs, STOs, and DeFi products. These projects might bypass strict disclosure requirements, investor protections, and anti-fraud standards that traditional securities markets require. This cautious approach delays the institutional integration of security tokens and investment tokens in Vietnam. Projects exploring tokenization models face considerable uncertainty as a result.
2.4 Ministry of Justice (MoJ): Harmonizing Digital Assets with Existing Legal Frameworks
The MoJ provides advisory roles focusing on legal consistency for digital assets. The MoJ proposes defining digital assets clearly as a new asset class in Vietnam's civil and commercial laws. This definition will establish crucial foundations for ownership disputes and legal contracts involving tokenized assets.
The MoJ promotes civil code amendment discussions with various stakeholders. Compatibility challenges with existing legal frameworks and complex interdepartmental coordination slow this progress. Cryptocurrency businesses and investors in Vietnam face legal uncertainties in disputes involving digital asset custody, theft, and liquidation without clear ownership regulations. Some criminal court rulings recognize cryptocurrencies as "assets with property value," providing legal protection in specific cases.
2.5 Ministry of Public Security: Prioritizing Anti-Crime Enforcement
The MoPS demonstrates a strict stance toward cryptocurrency's potential for financial crime exploitation. The MoPS focuses primarily on cracking down on crimes involving cryptocurrency fraud, illegal fundraising, money laundering, and tax evasion. The ministry proposes implementing stricter Know Your Customer (KYC) protocols for cryptocurrency platforms and establishing mandatory reporting systems for suspicious transactions linked to illegal activities.
3. Vietnam’s Crypto Regulation: Past and Present
Vietnam’s regulatory journey in crypto reflects a cautious, fragmented approach. While retail adoption surged, policymakers moved slowly to establish a legal framework.
2017: Crypto Payments Banned, Grey Zone Begins
The SBV issued Official Letter 5747/NHNN-PC prohibiting cryptocurrency use as legal payment methods. The government left ownership and P2P trading unregulated, creating a legal grey zone that fueled mass crypto adoption without formal investor protections.
2018-2021: Regulatory Silence
During this period, cryptocurrency activity in Vietnam exploded. Individual investors actively traded through global exchanges like Binance and DeFi platforms to bypass regulations, while cryptocurrency-related fraud cases multiplied rapidly. Businesses relocated overseas due to the absence of a clear legal framework. Sky Mavis and Kyber Network moved their operations to Singapore, causing Vietnam to lose talented professionals and potential investment opportunities.
2022: Vietnam Blockchain Association - VBA established
The Vietnam Blockchain Association (VBA) established to support blockchain technology development and legal framework construction in Vietnam. The association collects industry opinions for government communication and contributes to Vietnam's digital economy development through blockchain education and awareness campaigns.
2023: FATF Grey-listing of Vietnam Heightens Regulatory Urgency
The Financial Action Task Force (FATF) placed Vietnam on its grey list due to inadequate anti-money laundering (AML) regulations for cryptocurrency assets. This listing pressured the government to strengthen regulations on cryptocurrency exchanges, stablecoin issuers, and P2P transactions.
2024: Launch of the National Blockchain Strategy
Vietnam released the National Blockchain Strategy 2024-2030 (Decision No. 1236/QĐ-TTg) in October 2024. The strategy promotes blockchain adoption across sectors while emphasizing regulated experimentation through sandbox pilot programs for digital assets. This document marks the government's clearest recognition of blockchain's role in Vietnam's digital economy ambitions.
2025: Vietnam Initiates Digital Asset Regulatory Framework Development
The Vietnamese Prime Minister directed the Ministry of Finance and SBV to develop a comprehensive digital asset regulatory framework through Directive 05/CT-TTg. The Ministry of Finance collaborates with global exchange Bybit to develop a cryptocurrency sandbox program and plans to establish digital asset legislation. Potential delays in official law adoption may occur due to interdepartmental coordination challenges. When the sandbox officially launches in mid-2026, Vietnam will fully transition from regulatory uncertainty to a controlled market experimentation phase.
4. Vietnam’s Crypto Sandbox: A New Era of Controlled Experimentation
Vietnam begins to shift its cryptocurrency policy from observation to active management. In early 2025, the government initiated a pilot sandbox program for cryptocurrency exchanges under the Prime Minister's direct guidance. The Ministry of Finance leads this program in collaboration with international exchanges like Bybit. This sandbox framework represents Vietnam's first attempt to legitimize cryptocurrency trading in a controlled environment. The program focuses on testing compliance frameworks, AML/KYC procedures, and stablecoin applications.
The official structure and collaboration terms remain partially undisclosed. Bybit and global companies actively provide technical advice and policy input. These firms stand ready to participate but await clearer regulatory guidance. They need specifics on sandbox operations, licensing criteria, and government technology priorities. Progress speed depends on Vietnam's decision-making processes and legal implementation sequence.
Vietnam's National Blockchain Strategy (2024-2030) positions blockchain as a core pillar of digital transformation. Key objectives include legal recognition of blockchain applications and expanded use across multiple sectors. The strategy promotes "Made in Vietnam" blockchain platforms. These programs minimize regulatory barriers for blockchain innovation testing. Government and private sectors can learn and adapt in real time.
These preliminary developments signal an important perception shift toward blockchain. Vietnam now views blockchain as essential digital infrastructure rather than speculative assets. Early movers gain opportunities to align with national priorities and influence policy formation. They can build foundational infrastructure before formal regulations solidify. Vietnam offers companies a strategic window for meaningful industry participation.
5. Closing Thoughts
Vietnam stands at a critical turning point in its digital asset journey. The government moves from a regulatory gray zone toward cautious structural experimentation. Internal policy shifts and FATF compliance pressure influence this transition. The cryptocurrency sandbox framework development, blockchain strategy announcement, and digital asset law drafting show active government engagement.
Vietnam seeks balance between blockchain innovation and financial stability with regulatory compliance. Centralized AML/KYC compliance models will dominate short-term operations. DeFi and privacy-enhancing technologies face ongoing challenges.
The period before mid-2026 sandbox launch offers a crucial preparation window. Companies can engage policymakers, adjust operations, and build trust relationships. Proactive firms will secure leading positions when Vietnam formalizes the cryptocurrency market.
Success depends on regulatory foresight, operational transparency, and flexibility rather than technological innovation. Companies adapting to Vietnam's evolving regulations can capture Southeast Asia's digital economy opportunities.
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