Is Vietnam's Web3 on the rise? Regulatory uncertainty remains a major challenge
Vietnam is slowly but steadily changing its stance on blockchain and cryptocurrency.Author: Beosin
Web3 marks a new era of the internet, and Vietnam is at the forefront of this transformative wave.
There are many reasons why Vietnam is enthusiastic about Web3. For instance, the country's population is tech-savvy, the tech industry is thriving, government initiatives are in place, and there is widespread interest in blockchain and cryptocurrencies. We pose the question: Is Vietnam's Web3 rising?
Is Vietnam's Web3 Rising?
According to a research report by tiger-research, Vietnam has made remarkable achievements in the Web3 industry over the past two years among Asian countries. This development is based on three main factors:
(1) Vietnam has a large young population that is interested in new technologies and possesses a high level of technical skills. This provides a solid talent foundation for the development of Web3 technologies.
(2) High internet penetration rate: Vietnam ranks among the top in Southeast Asia for internet penetration, creating favorable conditions for the promotion and application of Web3 technologies.
(3) Active startups: Vietnam's entrepreneurial ecosystem is becoming increasingly mature, with many startups venturing into blockchain and Web3 technologies, driving innovation and development in this field.
On September 29, 2023, a seminar on "The Application of Blockchain Technology in the Digital Economy" was jointly held by the Science, Technology and Environment Committee of the National Assembly of Vietnam and the Vietnam Blockchain Association in Hanoi. During the seminar, Chairman of the Science, Technology and Environment Committee of the National Assembly, Le Quang Huy, emphasized the global applications of blockchain in various fields such as finance and energy. He also predicted that by 2030, the market value of the blockchain industry would reach trillions of dollars.
Vietnam is slowly but steadily changing its stance on blockchain and cryptocurrencies. Although there are currently no specific legal documents, recent government actions indicate that positive changes will occur in this field.
The Beginning of Regulatory Changes Related to Blockchain in Vietnam
However, the Vietnam Web3 market faces multiple challenges. The most prominent is the uncertainty surrounding cryptocurrency regulation, which severely impacts its business environment. Additionally, the lack of in-depth development skills and insufficient retail liquidity are major obstacles for Vietnam in the global Web3 competition. These challenges are significant considerations for Vietnam to become a global leader in the Web3 industry.
According to a report by TheRegister, as part of strengthening anti-money laundering (AML) efforts, the Vietnamese Ministry of Finance has proposed the possibility of banning or regulating virtual assets by May 2025.
This action plan aims to help Vietnam escape the "grey list" of the Financial Action Task Force (FATF). The FATF is an intergovernmental organization established by the G7 to combat money laundering.
The FATF's grey list includes countries that have committed to addressing identified obstacles to combating money laundering, terrorist financing, and proliferation financing within a specified timeframe. Countries on the list will be subject to increased monitoring.
The sixth action of Vietnam's national action plan states that the country will not only develop a legal framework to "ban or regulate virtual assets and virtual asset service providers" but will also "demonstrate the implementation of regulations, including measures to ensure compliance."
In September 2023, the Vietnam Bankers Association and the Vietnam Blockchain Association jointly held a meeting in Hanoi, focusing on strengthening legal regulations to prevent money laundering in cryptocurrency transactions.
Nguyen Quoc Hung, Vice Chairman and Secretary General of the Vietnam Bankers Association, emphasized the importance of the Anti-Money Laundering Law that came into effect in March 2023 and its related guidelines. He pointed out that the inadequacy of the legal framework and the lack of professionals in the digital and cryptocurrency fields have left banks and national regulatory agencies confused when dealing with cases involving new asset types. In-depth discussions on anti-money laundering are the beginning of many future blockchain-related regulations and are of great significance.
