What to know:
- Vietnam plans licensed cryptocurrency exchanges to reduce overseas trading and control capital.
- Authorities worry crypto popularity may increase capital outflows and financial risks domestically.
- Domestic cryptocurrency exchanges could support the digital economy and keep transaction fees local.
Vietnamese companies have started competing to launch the country’s first licensed cryptocurrency exchanges as authorities move to limit trading on foreign platforms.
As of Tuesday, March 17, officials see the plan as necessary because the nation ranks among the world’s most active crypto markets. The government wants stronger supervision over digital asset activity and cross-border money flows.
Hanoi plans to introduce a pilot program for locally operated cryptocurrency exchanges as early as this month. The move follows a government resolution issued in February.
Officials want the scheme to help regulators track transactions more closely while building a legal structure for digital assets inside the country’s financial system.
Also Read: Vietnam Proposes Crypto Tax Law in Major Push to Formalize the Market
Vietnam Shortlists Companies for First Exchange Licenses
A document from the finance ministry dated March 12 showed that five firms had passed the first qualification round. The firms applying for a license include affiliates of private banks Techcombank, VPBank, and LPBank.
Stockbroker VIX Securities and conglomerate Sun Group also qualified. Some of the firms confirmed their applications, but others did not respond when approached for comment.
A spokesperson for the ministry said that the authorities are working on the licensing procedure but did not want to comment on individual cases. This pilot program is a part of a broader policy strategy aimed at strengthening control over the trading of cryptocurrency.
Domestic cryptocurrency exchanges will make it easier for regulators to control the market, as currently, local traders use overseas exchanges.
Vietnam Plans Crypto Rules to Stop Overseas Trading
Today, Vietnam is among the busiest cryptocurrency markets in the world. The Global Crypto Adoption Index placed the country at number four last year.
In the country, blockchain data reported that the number of transactions conducted by Vietnamese traders exceeded $200 billion in just twelve months. This demonstrates the rapid growth of cryptocurrency adoption among households and investors.
Source: Reuters
There have been concerns about the increasing use of cryptocurrencies and stablecoins, especially in the region. There is a fear that if left unchecked, there could be huge capital outflows.
There are plans to introduce rules that could prohibit citizens from using overseas exchanges. Vietnam already maintains strict controls on cross-border money transfer services.
Limited Bonds and Stocks Drive Vietnam Crypto Adoption
Limited investment opportunities at home have also forced people to invest in digital assets. The bond market for corporations is still in a developing stage, and the stock exchange is still in a frontier status.
People often invest in gold and real estate. Gold prices are generally higher than international rates, and sometimes real estate faces issues of speculation and volatility.
While cryptocurrencies are not illegal in Vietnam, the law does not include them in the list of money or legal payment tools. This is the reason why most people in Vietnam use foreign exchanges such as Binance, OKX, and Bybit for trading.
However, using local exchanges for trading may help maintain the funds in the country and boost financial technology.
Industry experts are also warning that licensed platforms hold promise to help the digital economy grow, but regulators must first finish building the rules to govern them.
Experts are also warning that cryptocurrency exchanges can help grow the economy safely while increasing government revenues in the long run.
Also Read: Vietnam’s Crypto Licensing Begins Jan 20: What Investors Should Know
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