Vietnam has taken a decisive step in transforming its digital landscape. On June 14, 2025, the National Assembly passed the groundbreaking Law on Digital Technology Industry, which formally recognizes and regulates digital assets for the first time. This law categorizes assets into “virtual assets” and “crypto assets,” bringing clarity to a market previously shrouded in uncertainty. It will come into effect on January 1, 2026.
Why does this matter? Vietnam ranks among the world’s top five countries in crypto adoption, with roughly 17 million users and estimated holdings of around $100 billion. Yet until now, the ecosystem operated in a regulatory gray zone. Banks were barred from handling crypto, and users faced penalties—trading was permitted, but usage for payment was criminalized under previous rules. This law marks a dramatic shift, offering structured oversight, licensing regimes, and safeguards against fraud, money laundering, and cyber threats.
Context adds urgency. Since 2023, Vietnam has been listed on the Financial Action Task Force’s gray list due to inadequate anti-money laundering controls. The new law aligns with FATF standards, signaling a serious effort to rectify that status and restore Vietnam’s credibility in global finance.
Beyond crypto, the legislation fits within a bigger national agenda. It provides incentives for artificial intelligence, semiconductors, and digital infrastructure and outlines a vision to foster up to 150,000 technology firms by 2035. That vision connects digital assets with broader economic ambitions, positioning Vietnam as an innovation-driven economy.
This article will dive deeply into what the law actually says, why it stands out as a model for other emerging markets, where challenges may lie ahead, and how policymakers worldwide can adapt those lessons to build secure, transparent crypto frameworks—without stifling innovation.
Understanding the Vietnamese Regulatory Context
Vietnam’s journey toward formal crypto regulation didn’t begin on a whim. It was shaped by economic ambition, international pressure, and domestic urgency. The National Assembly saw this urgency crystallize in the Law on Digital Technology Industry, passed unanimously on June 14, 2025, and set to take effect on January 1, 2026.
This law doesn’t stand alone—it’s part of a strategic national blueprint. The Ministry of Science and Technology spearheaded the effort, aligning with broader national resolutions aimed at positioning Vietnam as a regional tech powerhouse. A key goal is to cultivate 150,000 technology enterprises by 2035, spanning AI, semiconductors, infrastructure, and now digital assets.
But there was a critical motivator: Vietnam’s lingering presence on the Financial Action Task Force’s gray list, starting mid‑2023, flagged the country for insufficient anti-money laundering controls, especially regarding digital assets. This international scrutiny created a deadline—it was time to act or risk long-term restrictions on investment, trade, and fintech partnerships.
Compounding this, Vietnam’s population was already deeply immersed in crypto. Industry estimates placed 17 million active users owning a combined $100–$105 billion in digital assets. That’s nearly a third of the nation, making it one of the most crypto-engaged populations globally. Yet, until this law, the ecosystem was stuck in limbo: trading was tolerated, but banks couldn’t touch crypto, and payments in tokens were technically illegal.
Prime Minister Phạm Minh Chính accelerated momentum in March 2025, instructing the Ministry of Finance and State Bank of Vietnam to finalize a crypto framework by May. By June, the Assembly had responded with a landmark legal structure that defines categories, mandates AML and cybersecurity controls, and introduces regulatory sandboxes for safe experimentation.
The result is a decisive pivot—from legal ambiguity to clarity; from fragmented actions to a cohesive strategy linking crypto regulation with economic growth.
Inside Vietnam’s Digital Asset Law: Key Provisions
Definitions and Classifications
The law introduces two distinct and formally recognized categories: virtual assets and crypto assets. Virtual assets are digital instruments used for exchange or investment purposes—loyalty points or in‑game tokens, for instance—that do not qualify as securities or state-sanctioned digital currencies. Crypto assets are differentiated by their reliance on encryption and blockchain validation. Notably, neither category encompasses securities, CBDCs, fiat representations, or traditional financial instruments. This binary taxonomy streamlines legal clarity and prevents overlaps with existing financial regulations.
Licensing, Custodianship, and AML/KYC
The law empowers the government to establish licensing criteria for entities like exchanges, wallet providers, and any custodial services dealing with encryption-based assets. It obligates operators to adhere to stringent anti-money laundering and counter-terrorism financing protocols. They must deploy robust cybersecurity strategies, maintain comprehensive KYC processes, and hold minimum capital reserves. For crypto asset exchanges, licensing will likely require physical presence and ongoing compliance, while unlicensed activity will be subject to enforcement actions.
Sandbox Mechanisms
Acknowledging the importance of innovation, the law mandates that regulators craft sandbox frameworks allowing startups to pilot new technologies—including DeFi products—under supervised conditions. These zones include liability protections for participating businesses and regulatory bodies, providing a safe environment for testing without compromising legal obligations.
Cybersecurity, AML, and FATF Alignment
Article 50 emphasizes compliance with global AML and cybersecurity norms. Vietnam has been on the FATF gray list since 2023, and this law represents a deliberate step toward meeting global financial integrity benchmarks. By January 1, 2026, all licensed entities will face regular monitoring, suspicious activity reporting and internal audit requirements, aligning industrial practice with legal expectations.
Taxation, Capital Requirements, and Support
While the law doesn’t specify tax rates for digital asset income, it grants authority to define tax structures—potentially including capital gains or transactional taxes—in forthcoming implementing decrees. Operators in digital tech, including crypto, benefit from incentives like import duty exemptions, R&D credits, and reduced corporate income taxes for up to 15 years. Minimum capital thresholds will ensure that only well-funded and responsible entities enter the market.
Investor Protection and Enforcement
The legislation includes concrete measures to protect investors. Disclosures, clear risk notices, and operational transparency are mandated for service providers. Penalties—ranging from fines to license revocation—will be imposed for scams, rug pulls, unregistered issuance, or market manipulation. By policing fraudulent behavior under a clear legal umbrella, the law aims to foster trust and stability in Vietnam’s crypto landscape.
Vietnam as a Regulatory Blueprint for Emerging Markets
Vietnam’s Digital Technology Industry Law is not merely a domestic policy—it stands as an exemplar for emerging economies seeking to balance innovation with responsible oversight. The country’s approach blends pragmatism, ambition, and regulatory discipline in a way that others can learn from.
From the start, Vietnam’s dual categorization of digital assets—virtual assets and crypto assets—offers clear legal boundaries tailored to operational risks. By distinguishing between in-game tokens or loyalty points and encryption-backed tokens requiring heightened scrutiny, regulators have avoided one-size-fits-all rules. This precision mirrors global standards while remaining grounded in local realities.
Vietnam also recognized that ignoring a major crypto‑using population was no longer viable. With approximately 17 million holders controlling over $100 billion worth of crypto—ranking among the highest adoption rates worldwide—it understood that regulation must accept, not suppress, the industry. Instead of sideline enforcement, the new law brings stakeholders into the light through licensing regimes, capital requirements, and AML/KYC rules aligned with FATF. That alignment is critical; it helped remove Vietnam from regulatory limbo and reassured global partners.
Moreover, the inclusion of regulatory sandboxes shows impressive foresight. Countries like Nigeria or Brazil being heavy on policy but light on testing could take note. Vietnam’s sandbox allows controlled experimentation—from token issuance to DeFi tools—without exposing the broader system to unvetted risk. That controlled freedom is rare and valuable across emerging markets.
Vietnam also baked in economic incentives that align with broader digital strategy. Operators qualifying under the law receive tax breaks, subsidies, streamlined visas, and even incentives to hire digitally skilled talent—all in the service of a 2035 target of 150,000 tech firms. This is policy harmonization at its best: crypto sits within, not beside, an overarching development agenda.
In comparison with other emerging actors, Vietnam’s framework shines. The Philippines has followed piecemeal regulation without unified crypto law; Nigeria’s restrictions have driven many users toward offshore services; Brazil’s centralized focus on securities leaves nascent asset classes underserved. None have yet linked crypto to economic growth, fintech competitiveness, and AML alignment as cohesively as Vietnam.
What’s revolutionary about Vietnam is the tone: regulation as empowerment. Emerging markets chasing digital economies can replicate this ethos—investor protection without stifling developer creativity; international compliance without domestic strangulation; innovation without invisibility.
Vietnam’s model becomes a blueprint not because it’s perfect, but because it’s purposeful. It shows a path from legal gray zone to tech-led national strategy—one defined by clarity, coordination, collaboration, and credible ambition.
Challenges and Criticisms of Vietnam’s Approach
Vietnam’s bold regulatory move drew praise, but it also surfaced several critical areas that may limit its effectiveness and raise concerns for stakeholders.
Centralization and State Control
Experts note a strong centralizing tendency in the law’s structure. Licensing requirements, capital thresholds, cybersecurity mandates, and AML/KYC responsibilities are largely under the control of centralized government bodies like the State Bank and Ministry of Finance. This could stifle smaller operators or innovative startups that struggle to meet heavy compliance burdens. Centralized control might also create bureaucratic bottlenecks, limiting access for rapidly emerging DeFi or small exchange projects.
Innovation Bottlenecks
While sandboxes are included, firms still await clarity on how these operate—especially for more experimental sectors like DeFi and privacy-enhancing technologies. Industry voices have highlighted delays in detailed guideline issuance, leaving companies in limbo. Without clear, timely regulations and a transparent sandbox rollout, Vietnam risks discouraging the very innovators it sought to empower.
Implementation Risks and Detail Gaps
The law grants regulators significant discretion via upcoming sub-decrees, but critical details—such as precise licensing criteria, sandbox parameters, token classifications, and tax implications—aren’t yet defined. This regulatory uncertainty may deter international investors and fintech firms that require clarity before committing operations or capital.
International Coordination Complexities
Vietnam is aiming to align with FATF standards and build cross-border legal frameworks, but harmonizing its laws with those of ASEAN or larger jurisdictions like the EU or U.S. will be challenging. Without robust bilateral or regional agreements, its national framework may fall short of delivering seamless international compliance or interoperability.
Policy Recommendations for Other Emerging Markets
Vietnam’s thoughtful approach offers a playbook for nations striving to regulate digital assets without hampering innovation. First, assemble a multi-stakeholder task force that includes regulators, industry experts, startup founders, legal academics, and civil society representatives. Vietnam’s early consultation phases led by the Ministry of Science and Technology resulted in balanced definitions and licensing frameworks.
Second, use regulatory sandboxes. Vietnam’s two-tier sandbox model—guided both by the Ministry of Science and Technology and the Ministry of Finance—creates separate but coordinated pilots for blockchain, DeFi, and fintech. Other states can replicate this model: tightly scoped, time-limited environments that allow testing without full compliance exposure.
Third, establish clear token taxonomies. Vietnam’s bifurcation of virtual assets and crypto assets, combined with draft guidance on applying VAT and income tax—possibly around 10 percent for individuals and 20 percent for businesses—lays groundwork for transparent, enforceable tax rules.
Fourth, align with global standards. By basing AML/KYC on FATF guidelines and addressing its “gray list” designation, Vietnam not only upgraded domestic controls but also improved foreign investor confidence.
Finally, tether digital-asset rules to broader economic goals. Vietnam bundled fintech regulation with incentives across AI, semiconductors, cloud, and data sectors—aiming for 150,000 digital firms by 2035. Integrating crypto into national digital strategy unlocks synergies and political support.
Vietnam’s Regulatory Blueprint
Vietnam has transitioned from regulatory ambiguity to pioneering leadership in digital-asset law. The Law on Digital Technology Industry, effective January 1, 2026, achieves much more than clear definitions, licensing requirements, and AML alignment—it represents a strategic embrace of crypto as part of the country’s digital transformation.
This law provides guardrails and clarity, enabling innovation within secure boundaries. It resolves the paradox of a deeply crypto-engaged population operating in legal shadows. And it positions Vietnam as an actionable case study for emerging markets: clarity through taxonomy, innovation through sandboxing, investor trust through AML/KYC, and growth via economic alignment.
Future success will depend on precise implementation—transparent licensing, sandbox execution, fair taxation, and international cooperation. For policymakers watching closely, the lesson is clear: regulation need not suppress innovation; it can light its path.
Final Thought
Vietnam has shown what is possible when ambition meets legislation. Its journey from gray zone to regulatory pioneer offers a model of balance, direction, and purpose—ready to be adapted and refined by any country ready to realize its digital potential.
