Discussing the draft law on Digital Technology Industry at the meeting hall last weekend, many National Assembly deputies emphasized the need to have regulations on digital assets in this draft law.

Vietnamese people own the second cryptocurrency in the world?

According to many National Assembly deputies, it is necessary to continue to perfect the regulations on digital assets in the draft law on Digital Technology Industry . There must be a specific classification of digital assets to have different management options, for example, with cryptocurrencies there are different regulations; representative digital assets or virtual assets in the digital ecosystem must also have different regulations.

In fact, digital asset or cryptocurrency trading activities in Vietnam are quite active even though they have not been recognized. Yesterday, December 1, Bitcoin ( BTC) was traded around the level of over 96,500 USD/coin, down from the record peak of over 99,000 USD set 10 days ago but still a very high price range. Since the beginning of November, after Bitcoin continuously increased and broke all old records, on many social networking forums, the number of people discussing it enthusiastically. 

Mr. Ngoc Hung, an investor in Ho Chi Minh City, excitedly boasted that he not only “returned to shore” after more than 2 years but even made a profit thanks to his determination not to sell digital currencies despite “losing his face” before. However, individuals who made a profit are still considered rare. According to some investors, Bitcoin is too expensive so not everyone dares to buy it. Most Vietnamese people only own Altcoins (digital currencies other than Bitcoin) but the price has not increased strongly. For example, ETH is currently trading around 3,700 USD, quite high compared to 2,000 USD at the beginning of the year. In May, this currency recovered to over 4,000 USD and compared to the all-time high of 4,900 USD 3 years ago, ETH is still quite far away…

Mr. Phan Dung Khanh, a financial market expert, also said that besides Bitcoin, only 2-3 Altcoins increased in price during this period, so the number of investors “winning” in the market is not much. Not to mention some investors who have suffered heavy losses before, so they did not participate. However, the skyrocketing price of Bitcoin has made investors increase their expectations for digital currencies. “On some investment forums in general, even many stock brokers recently, due to the low trading market and volatile stocks, have also boasted of switching to profitable cryptocurrency surfing. But I talked to many people who participated before, because most of them bought Altcoins, some have not yet broken even and returned to shore. Therefore, even though Bitcoin has set a new peak and skyrocketed, not everyone has made a profit,” Mr. Phan Dung Khanh commented.

Many research reports and statistics show that Vietnam is second in the world in terms of the percentage of people owning digital assets, with about 20 million people and about 120 billion USD of cryptocurrency poured into our country every year. Specifically, in early May, according to statistics from the Triple-A cryptocurrency payment gateway, Vietnam ranked second in the list of countries with the highest percentage of people owning cryptocurrency in the world. Specifically, with a rate of 21.2% of the population owning cryptocurrency, Vietnam is only behind the UAE with a rate of 34.4% and higher than the US (15.6%). In March, data from the US blockchain research company Chainalysis also showed that players in Vietnam made the third most profit from cryptocurrency in the world, with a profit of 1.18 billion USD in 2023. Vietnam is also one of 8 countries with profits from cryptocurrency reaching over 1 billion USD. Another statistic from the Wall Street Journal in May 2023 also showed that Vietnamese people traded the fourth most cryptocurrencies in the world on the Binance exchange. Accordingly, Vietnamese investors traded about 20 billion USD, and the Future form (futures contracts) accounted for 90%…

Legal void, risks for both traders and managers

Triple-A commented that Vietnam currently does not allow trading in goods using cryptocurrencies, but owning cryptocurrencies is still in a “gray area”, making it an attractive asset. Lawyer Truong Thanh Duc, Director of ANVI Law Firm, emphasized that over the past decade, cryptocurrencies have actually existed and been traded a lot, but there have been no regulations on management. Many opinions have been proposed and even the Government has assigned relevant agencies to research, but they are still “raising and lowering” without issuing any regulations. The announcements from the State Bank are only a declaration that cryptocurrencies are not accepted as a means of payment and do not mean banning cryptocurrency transactions. 

“Digital assets in general or digital currencies have now developed, are related to many people and are a world trend. Therefore, Vietnam must have a legal framework to regulate them and cannot leave them hanging like in the past many years. It is agreed that digital currencies should be banned as a means of payment, but transactions, gifts, and inheritance transfers should not be banned. We must have detailed regulations such as definitions of digital assets and digital currencies. Next, what will be restricted, what conditions will be set, or what activities must be registered… From there, we will consider how to apply taxes to these asset transactions. If left open, there will be many consequences. People do not know what is right and what is wrong, so they are easily lured and scammed due to ambiguity, and the state also loses tax revenue when the number of transactions is quite large,” said lawyer Truong Thanh Duc.

Sharing the same view, Mr. Phan Dung Khanh also said that Vietnam has not had any regulations prohibiting cryptocurrency transactions, so it can be said that this activity is in a “gray area”, with unclear legality. This puts participating investors at a disadvantage. Meanwhile, if the statistics from the above organizations are correct, the amount of more than a hundred billion USD in annual transactions is very large. The lack of a legal framework causes the state to lose a significant amount of tax revenue. Therefore, according to Mr. Khanh, Vietnam can refer to some regulations of other countries in this field, but should follow the direction of encouraging the development of platform technology in the field of digital assets and cryptocurrencies such as Blockchain, artificial intelligence (AI) … because they are also widely applied in other fields. Moreover, regulations need to be in the direction of strictly managing speculative and fraudulent factors because cryptocurrencies operate in the digital space and are international in nature, so they are complicated and subjects are also more likely to commit fraud.

Many virtual currency exchanges organize seminars, calling for investors

According to the Vietnam Blockchain Association, in Vietnam, there are currently many units operating in the field of virtual assets but with unclear information such as CrossFi, Mineplex, ALEO… They organize secret seminars, taking advantage of the images of many people to create prestige to mobilize money from participants. For example, CrossFi organizes seminars for thousands of people and mobilizes up to 3,000 billion VND in Vietnam. Besides, there are currently many virtual currency exchanges such as Binance, Mexc, BingX, Gate.io… that organize marketing and promote virtual asset services without permission. In addition, some exchanges, when contacted by the Blockchain Association after receiving complaints from users about being scammed, did not cooperate to resolve the issue. The lack of a legal framework causes participants in digital asset transactions to face risks such as information disclosure risks; financial risks; personal data risks…