Behind the rush of cryptocurrency exchanges into Vietnam: Crypto users exceed 16 million, with total trading volume higher than Singapore

Author: Grapefruit, ChainCatcher

The favorable conditions created by potential population growth dividends, relatively tolerant regulatory policies, and low operating costs have made Vietnam a gold mine in the eyes of people from various industries.

The explosive success of the blockchain game Axie Infinity in 2021 attracted the attention of the Web3 industry to the Vietnamese market. Many believe that Vietnam may become an important driving force in the next wave of the cryptocurrency bull market, with the focus of cryptocurrency trading gradually shifting from the current markets of South Korea and Japan to emerging Southeast Asian markets such as Vietnam and the Philippines.

In early August, an exclusive article published by The Wall Street Journal regarding the Binance China Market Operations revealed that the Vietnamese market has risen to be among the top five countries in Binance's trading volume. According to internal information collected by The Wall Street Journal, in May 2023, Vietnamese investors' trading volume on Binance reached approximately $20 billion, with futures trading accounting for about 90%. The trading volume of Vietnamese users ranked fourth among many countries in Binance's overall trading volume.

Top 5 countries by Binance spot and futures trading volume in May 2023

This news quickly became a focal point for leading Vietnamese crypto media outlets such as Coin68 and Coin98insight, also indicating that the Vietnamese market has become an important area in the crypto industry that cannot be ignored.

Compared to the top three countries—China, South Korea, and Turkey—Vietnam's rise to become the fourth largest trading volume country on Binance is indeed intriguing.

We may not be unfamiliar with China, South Korea, and Turkey being hotbeds for cryptocurrency trading. Among them, China's large user base of crypto users makes it unsurprising that it ranks high in trading users and volume; South Korea, with high unemployment rates and housing prices, has a rigid class structure, leading young people to view cryptocurrency investment as a hope for upward mobility, often being seen as the country with the most participants in speculative trading; Turkey, with its persistently high inflation rate and severe depreciation of its currency, the lira, forces people to seek inflation-resistant assets, making stablecoins and Bitcoin a good choice for Turks.

Although Vietnam is still considered an emerging market in the crypto field, various data indicate that the number of crypto users in Vietnam has not lagged behind; rather, it ranked first in cryptocurrency adoption for two consecutive years in 2021 and 2022.

However, aside from Axie Infinity, there is not much reporting on the Vietnamese market, leading to a lack of understanding among users, who have long viewed it as a mysterious entity.

Since Vietnam has grown into an important region in the crypto industry that cannot be ignored, quickly understanding the layout of Web3 projects and related enterprises in this market has become an urgent task. As exchanges serve as the first entry point for users into the crypto world, the trading activity of their users is often used to measure the popularity of crypto activities in the local market. So, what is the development status of the crypto trading landscape in Vietnam?

In China, there are leading exchanges like Binance and OKX, and in South Korea, there are Upbit and Bithumb. What trading platforms are available in the Vietnamese market? What standards do local users have for choosing exchanges? This article will systematically outline the current development status of the Vietnamese crypto market and the landscape of crypto exchanges.

Population Dividend Releases Growth Potential in Vietnam's Crypto Market, Adoption Rate Ranks First for Two Consecutive Years

In 2021, the phenomenal product Axie Infinity not only created job opportunities and a means of livelihood for people in Southeast Asia, including Vietnam and the Philippines, but also sparked a wave of Web3 entrepreneurship in the region, giving rise to globally influential Web3 projects such as Yield Guild Games (YGG) and Ancient8.

The commonality among these projects is that their founding teams are based in Vietnam. Their success has attracted the attention of the crypto industry to this fertile land, making it a gold mine for the Web3 industry. A large amount of international capital and crypto enthusiasts have begun to enter Vietnam, with some venture capital firms even establishing special investment funds for Web3 projects created by Vietnamese teams, hoping to find the next "Axie Infinity" in Vietnam.

According to the 2022 Vietnam Cryptocurrency Market Report released by Coin98 Insights in March this year, 7 of the top 200 blockchain companies in the world were founded by Vietnamese, including Axie Infinity, Ancient8, Yield Guild Games, Coin98, and Kyber Network.

As of December 2022, there were over 200 blockchain projects operating in Vietnam, covering multiple fields, including GameFi, DeFi, and NFTs. Among them, game and metaverse projects accounted for 28.8%, DeFi accounted for 26.0%, NFTs accounted for 12.4%, infrastructure accounted for 11.3%, and Web3 accounted for 5.1%.

Additionally, the report stated that from July 2021 to June 2022, Vietnam's digital asset trading volume reached $112.6 billion, surpassing Singapore's $101 billion.

In the "Global Cryptocurrency Adoption Index" report released by blockchain data company Chainalysis, Vietnam ranked first in cryptocurrency adoption for two consecutive years in 2021 and 2022. In centralized services, DeFi, and P2P trading, the Vietnamese market shows extremely high purchasing power and population adoption rate. Hunter, a partner at Vietnamese crypto media BitouchNew, deeply resonates with this, stating that you can see people on the streets of Vietnam exchanging USDT for Vietnamese dong (VNT) using black plastic bags, and USDT can also be used to pay rent and some living bills.

All these data fully demonstrate the potential and promising prospects of the crypto market in Vietnam. Currently, the development of the Vietnamese crypto market cannot be ignored. According to a report by MarketsandMarkets, by 2026, the value of the blockchain-related market in Vietnam is expected to reach nearly $2.5 billion, growing fivefold from 2021.

However, for crypto enterprises, whether a market is profitable (such as lower costs), whether it can bring potential user growth, and whether policies are supportive will all become important considerations in deciding whether to explore that market. In today's Vietnamese market, costs and user growth seem to meet expectations on both fronts.

First, in terms of costs, Vietnam can provide relatively low labor costs. According to data from the Coin98 Insights report, the average salary of blockchain personnel in Vietnam is relatively low compared to the global average. For example, the average salary for an HR position in Vietnam's blockchain sector is $30,000/year, while it is $42,000/year in North America. For the developer positions, which are most important for Web3 enterprises, the average monthly salary for management is $2,526.

At the "GM Vietnam Blockchain Week" event held in Ho Chi Minh City in July this year, a set of data from the organizer Kyros Ventures indicated:

Assuming a Web3 startup with a structure of 10 people (1 CEO, 5 engineers, 2 marketers, 1 BD, and 1 designer) has an initial startup fund of $5 million, if the headquarters is located in Vietnam, this configuration could sustain the company for 18 years. The same configuration in China could last for 8.5 years, in Singapore for only 3.4 years, and in the U.S. for just 2.9 years.

Secondly, the population growth dividend in Vietnam can bring potential user growth for crypto enterprises. In April this year, Vietnam's population officially surpassed 100 million, becoming the third Southeast Asian country with a population over 100 million after Indonesia and the Philippines. The population structure is predominantly young, with those aged 18-34 making up the majority, perfectly matching the target audience for cryptocurrencies, providing ideal soil for cryptocurrency adoption.

Additionally, Vietnam has a high penetration rate of mobile internet, making the cost for users to learn about Web3 relatively low. As long as enterprises adopt appropriate incentive measures, they can attract these groups and potentially gain user growth. Data has indicated that currently, there are over 16.6 million cryptocurrency holders in Vietnam, accounting for one-fifth of the total population, with 31% holding Bitcoin.

In terms of policy, currently, the Vietnamese government does not have a clear regulatory legal framework for cryptocurrencies, so trading in such assets remains in a gray area.

Although the State Bank of Vietnam (SBV) explicitly prohibited all transactions related to cryptocurrencies through the banking system back in 2018, it did not stop Vietnamese users from using cryptocurrencies. Moreover, the Prime Minister of Vietnam announced an initiative in July 2021, instructing the State Bank of Vietnam to study and carry out a pilot program for digital currency, while stating that cryptocurrencies and blockchain are technologies that Vietnam hopes to develop and master, beneficial for building a digital government.

Furthermore, as the application and demand for cryptocurrencies in Vietnam continue to rise, the Vietnamese government has begun to realize the potential and importance of cryptocurrencies and is exploring how to regulate and manage the cryptocurrency market. In July last year, Prime Minister Pham Minh Chinh called for the Vietnamese government to study cryptocurrency regulation and to include amendments for virtual currencies in anti-money laundering legislation, although the related regulatory bills have yet to be implemented.

Regarding the implementation of cryptocurrency regulatory policies in Vietnam, Hunter mentioned that the complexity of the Vietnamese government's structure makes it not easy to formulate relevant crypto policies, requiring coordination and agreement from multiple government departments before reaching a conclusion. Therefore, there should not be any specific crypto policies introduced in the short term.

It is evident that Vietnam currently has a young, relatively low-cost labor force and maintains an open attitude towards new technologies like blockchain, while the ambiguous regulatory policies also provide opportunities for the development of crypto-related projects.

What Crypto Trading Platforms Are Available in Vietnam?

As exchanges serve as the first entry point for users to access the crypto world, most users and liquidity in the crypto market are concentrated in centralized exchanges. The trading volume and user activity of these platforms are often used as important indicators to measure whether a market is prosperous. Vietnam, considered to have the most market potential, is naturally seen as a gold mine by crypto trading platforms, which are rushing to establish a presence.

As early as 2019, Binance had already expanded its market in Vietnam. Its CEO Changpeng Zhao even stated during the 2020 Binance Vietnam Blockchain Week that "since 2018, Vietnam has been one of our markets with the highest user activity. Vietnamese users have shown great enthusiasm for blockchain-based financing and trading, and Vietnam is likely to become the next global blockchain innovation center." In 2022, Zhao appeared again in Vietnam and attended the Vietnam NFT Summit held in Hanoi, signing a strategic partnership with the Vietnam Blockchain Association (VBA).

During the same period, well-known exchanges such as OKX, Huobi, and Bithumb also announced the launch of their Vietnamese platforms, entering the Vietnamese market. Recently, exchanges continue to lay out in this market; in June this year, the crypto trading platform Blofin announced it would launch trading platform services with a Vietnamese language page for the Vietnamese market.

So, what trading platforms are available for users in Vietnam? What differences do these platforms have in their products for Vietnamese users, and what special benefits do they offer?

1. Mainstream International Exchanges That Laid Out Early in Vietnam

• Binance's C2C Supports Buying and Selling Crypto Assets with Vietnamese Dong (VND) via Credit Card

Binance launched its C2C service with the ability to buy and sell using Vietnamese Dong (VND) back in 2020, allowing users to directly use credit cards like Visa to buy and sell BTC, USDT, ETH, BNB, BUSD, and other cryptocurrencies.

According to its official Vietnamese page, Binance lists over 350 cryptocurrencies, with trading fees as low as 0.1%.

In 2022, Binance announced a strategic partnership with the Vietnam Blockchain Association (VBA) to jointly explore the research and application of blockchain technology and to train relevant talents in Vietnam.

• OKX Supports Vietnamese Users Trading with VND

Compared to Binance, OKX laid out in the Vietnamese market earlier, launching VND trading services in its fiat trading area in 2018, allowing Vietnamese users to place VND trading orders and launching a Vietnamese version of its contract trading products.

• MEXC is Known for Its Variety of Assets in Vietnam

For MEXC users, the main reason for choosing MEXC among many exchanges is its rich asset offerings, where almost all innovative projects can be found for trading pairs. It is reported that MEXC currently supports trading for over 1,500 cryptocurrencies. MEXC supported the Vietnamese language version in August 2019.

• Bybit's Trading Volume in the Vietnamese Market Grew Twofold in 2022

According to Bybit's Next Level 2022 performance report released in September 2022, its total trading volume in the Vietnamese market grew twofold (109%).

According to an interview with its founder Ben, Bybit began to focus on the Southeast Asian market in 2020.

What sets Bybit apart is that it does not require KYC for cryptocurrency trading, allowing investors to start trading with just an email and password. This aspect makes Bybit an attractive choice for Vietnamese investors. Additionally, the platform provides a channel for Vietnamese Dong fiat deposits and withdrawals, offers zero fees for spot market trading in the short term, and has a dedicated customer service team to handle inquiries from Vietnamese clients.

• Huobi Has Quietly Deepened Its Roots in the Vietnamese Market

Alongside OKX, Huobi's OTC trading area began supporting VND transactions and launched a Vietnamese language version for its contract trading in 2019. According to industry insiders, Vietnam was a key overseas market for Huobi in 2022, providing a series of preferential policies to Vietnamese partners, such as generous commission rates, attracting many financially capable professional traders to the platform. However, since Huobi was acquired by Hong Kong's Baidu Capital in October 2022, its Vietnamese operations have been temporarily shelved.

According to data from the Statista analysis platform, there was a period in 2022 when Huobi's market share briefly exceeded that of Binance.

• BingX Established Its Presence Locally by Collaborating with Vietnamese Community KOLs

The derivatives trading platform BingX, formerly known as "BingBon," rebranded in November 2021 and quickly established its presence in the Vietnamese market through collaborations with local community KOLs, and it has an office in Vietnam. According to its end-of-year report in 2022, it increased over 200 positions in its global offices in regions such as Germany, Turkey, South Korea, and Vietnam.

2. Most Local Vietnamese Trading Platforms Are OTC

• Peer-to-Peer Trading Platform Remitano

Remitano is a local peer-to-peer trading platform for crypto assets in Vietnam, established in 2014, allowing users to buy BTC, USDT, ETH, BNB, and other assets in a peer-to-peer manner. Since the entry of exchanges like Binance, this platform has become an important player in Vietnam's crypto asset trading and is the main source for many OG players in Vietnam. However, due to the P2P trading model, each transaction requires confirmation from both parties, resulting in lower efficiency and losing market share to overseas exchanges.

• Vietnam's Largest OTC Trading Platform BitcoinVN

BitcoinVN is the largest local OTC trading platform for cryptocurrencies in Vietnam, supporting both crypto-to-crypto and fiat trading, including multiple fiat channels such as the Vietnamese Dong.

In summary, there are very few localized exchanges in Vietnam, most of which are OTC platforms.

Vietnam's Crypto Trading Landscape: Dominated by Overseas Platforms, Users Prefer Large Exchanges with High Security

"There is a lack of mature local trading platforms in the Vietnamese crypto market, mainly dominated by foreign brands, and local investors tend to choose the latter." This is a consensus among industry insiders familiar with the Vietnamese market. Now, multiple crypto trading platforms have launched services in Vietnam. What is the current landscape of exchanges in Vietnam? What standards do local investors use to select exchanges?

In fact, the Vietnamese crypto market also follows the 80/20 rule, with leading trading platforms occupying about 80% of the market share, while the remaining platforms share the remaining 20%.

The criteria for Vietnamese users when selecting exchanges are not much different from those in other countries. In this regard, a local Vietnamese crypto industry professional named Mumu (pseudonym) stated that asset security and platform reliability are the first principles for Vietnamese users when choosing a trading platform. Next is whether the website is user-friendly for Vietnamese users (such as supporting Vietnamese language, allowing deposits and withdrawals in VND or local banks), and the liquidity of assets on the platform. Additionally, they consider whether the platform's customer service is timely and professional, trading fees, and the variety of supported assets.

Moreover, she added that many Vietnamese people's thinking is quite similar to that of Chinese users. Just as Chinese users choose trading platforms, Vietnamese users do the same, prioritizing industry-leading platforms that support Vietnamese operations.

Currently, popular crypto platforms in the Vietnamese market are mostly those previously used by domestic users, such as Binance, Bybit, and MEXC.

According to SimilarWeb's statistics on website traffic share for five trading platforms, in the past year, Binance's official website accounted for about 70% of the total search traffic in the Vietnamese market, followed by Remitano at about 10%, and then MEXC, OKX, Bybit, etc.

Regarding this statistical data, Tam, an OG user in the Vietnamese crypto space, was not surprised. He explained that based on personal experience and the data he has, this market share aligns closely with his predictions, in Vietnam, Binance has the largest market share, followed by Bybit, OKX, MEXC, and local platform Remitano.

The reasons for this prediction are that Binance is currently the leading trading platform, relatively reliable in security, supports a wide variety of cryptocurrencies, and is a comprehensive exchange (supporting both spot and derivatives), making it very user-friendly for Vietnamese users (with a Vietnamese language page and support for Vietnamese credit and debit cards). Most Vietnamese users will choose Binance as their first option. Remitano has many OG users in Vietnam, Bybit's futures and derivatives are excellent with relatively low trading fees, OKX has laid out early in Vietnam, and MEXC supports a wide variety of assets. Of course, some players use less well-known platforms or try out new platforms, but this is not mainstream in Vietnam. Currently, most well-known and recognized platforms in Vietnam are the leading platforms in the global crypto trading space and some that have been in the Vietnamese market for a while and can provide their advantages.

It is clear that the competitive landscape of the Vietnamese crypto trading market has entered a heated stage, with major overseas platforms dominating. New trading platforms entering the market will find it difficult to break through in a short period without some strategies or unique advantages.

Entering Vietnam Remains a Good Opportunity, Operational Strategies Must Be Tailored to Local Conditions

Although the current competition in the Vietnamese crypto trading market seems quite sufficient, for a market with population growth dividends, it is still a good opportunity for both exchanges and other Web3 projects to enter the Vietnamese market.

Tina, who has researched the Vietnamese market, strongly agrees with this view. She stated that many Web3 enterprises are now focusing on the Vietnamese market, especially evident this year. At the GM Vietnam Blockchain Week event organized by Coin98 and Kyros Ventures in July, you could see booths from globally renowned projects like Polygon, Aptos, Coinbase, Chainlink, Avalanche, etc., and meet crypto enthusiasts from various countries, making the conference very international.

This is a stark contrast to previous blockchain events in South Korea, where the attendees were mostly locals, with few international participants. In contrast, several conferences held in Vietnam this year featured very international attendees discussing cutting-edge industry topics, such as BRC20 from a few months ago, with some projects even having Vietnamese founders or communities behind them. Earlier that same month, the Vietnam Blockchain Association and Spores Network announced a partnership to launch the Web3 accelerator program SwitchUp, with over 50 funds and international organizations investing to support Web3 startups in Vietnam.

She also mentioned that developers in Vietnam generally have very good English skills, which makes it a very labor-efficient place for projects looking to deploy globally. Additionally, many universities in Vietnam have set up projects and training courses in collaboration with blockchain enterprises, which can supply quality Web3 talent. Furthermore, Vietnamese users are very willing to spend money and time to learn about the crypto industry. Many of her Vietnamese friends are willing to spend several million VND to participate in blockchain-related training courses to learn how to trade cryptocurrencies and related development knowledge.

However, for Web3 projects to achieve success in the Vietnamese market, they still need to develop operational strategies that align with local user habits.

Tina explained that, for example, in terms of social channels, Vietnamese users prefer to use Facebook rather than Twitter or YouTube, so Web3 enterprises entering Vietnam should prioritize establishing a presence on Facebook. Additionally, some crypto communities in Vietnam have very strong influence, such as BingX, which quickly established its presence in the Vietnamese market through community collaborations.

She also added that Vietnamese crypto users do not invest large amounts, averaging around $100, and the disclosed data from Binance also shows that Vietnamese users prefer high-risk futures trading, indicating a speculative tendency. Enterprises should not neglect service to these users simply because their investment amounts are small. This is mainly because most crypto investors are young people who have just started working and currently have low incomes, leading to lower investment amounts. However, this also means that as their salaries increase, their investment amounts will also grow.

Of course, this does not mean that entering the Vietnamese market is without risks. The biggest uncertainty currently comes from government regulation. Due to the lack of a clear and specific regulatory framework, Web3 projects are in a stage of wild development. Once regulatory policies are truly implemented, they will inevitably impact some enterprises.

However, some believe that when regulation is finally introduced, it may have adverse effects on the Web3 industry in the short term, but in the long run, clear regulations may encourage broader adoption, improve policies, and lay a foundation for retail and institutional participation, providing greater protection for investors.