As Vietnam moves towards experimenting with digital asset issuance and trading, the Ministry of Finance has submitted a draft resolution to the government, highlighting both new opportunities and potential risks associated with blockchain and cryptocurrencies.

Exploring digital assets amidst regulatory challenges

According to Dr. Dang Minh Tuan, President of the Vietnam Blockchain Union, statistics from several organizations estimate that digital asset inflows into Vietnam in 2023 ranged between $105 billion and $120 billion. This figure accounts for approximately 25% of Vietnam's GDP.

Dr. Tuan acknowledges that digital assets represent a key component of the digital economy and present an opportunity for Vietnam to emerge as a regional and global digital asset hub.

However, he warns that the rapid and volatile nature of digital assets poses unique challenges compared to the traditional stock market.

"Digital assets and cryptocurrencies are inherently risky due to their high volatility and cross-border trading capabilities, often involving anonymous transactions. This makes regulatory oversight, including anti-money laundering and counter-terrorism financing, significantly challenging," Dr. Tuan stated.

He emphasized that the experimental approach to digital assets is being conducted without a well-tested legal framework and without in-depth studies or management experience, making the potential risks considerable.

Coordinated management and legal framework

To address these concerns, Bui Hoang Hai, Vice Chairman of the State Securities Commission (Ministry of Finance), revealed that the Ministry has presented the government with a draft resolution to pilot the issuance and trading of digital assets.

Previously, the government assigned the Ministry of Finance to develop a resolution aimed at piloting the digital asset market in Vietnam.

The goal is to create a legal environment that supports innovation while mitigating negative impacts on the economy and society.

The draft resolution proposes inter-ministerial coordination between the Ministry of Finance, Ministry of Public Security, and the State Bank of Vietnam to promote market activities while minimizing financial security risks and ensuring financial market stability.

Tax policy and revenue management

Regarding tax policy for digital asset transactions, representatives from the Department of Tax Policy and Management noted that Vietnam’s existing tax regulations already cover a broad range of taxable goods and services.

Both domestic and foreign enterprises operating in Vietnam are subject to taxes such as Value-Added Tax (VAT), Corporate Income Tax (CIT), and Personal Income Tax (PIT).

However, the lack of clear legal provisions related to digital assets means that determining tax obligations for transactions and business activities remains ambiguous.

If sector-specific laws clearly define digital assets and their legal status, tax obligations will be imposed accordingly.

Balancing opportunity and risk

According to the Ministry of Finance, the rapid growth of digital assets and cryptocurrency markets globally has created both opportunities and risks for financial stability. Many countries are actively working on legal frameworks to regulate and manage these emerging markets.

Vietnam’s approach of piloting the digital asset market aims to create a flexible legal environment, adapting swiftly to technological innovation while maintaining state oversight. This strategy supports capital mobilization for business development, fosters the digital economy, and contributes to economic growth.

The pilot project, conducted on a limited scale with strict regulatory oversight, is intended to meet market demands while allowing government agencies time to develop appropriate policies. This cautious approach aligns with the global trend of experimenting with digital asset regulation.

The ministry also emphasized that implementing the pilot market will reduce illegal activities such as money laundering and terrorism financing, protect investors, and build a transparent, safe, and sustainable financial market.

Trong Dat