On March 1, 2025, Prime Minister Phạm Minh Chính signed Directive 05, requiring a legal framework for digital currency to be completed by the end of March – a bold move placing digital currency at the center of Vietnam’s economic future. Amidst the boom in virtual assets, this is the moment for Vietnam to define its role in the digital era.
Digital Currency – Trends and Vietnam’s Position
Digital currency, from prominent names like Bitcoin and Ethereum to decentralized finance platforms, has transcended technological concepts to become a global trend, changing how the world conducts economics. Billions of dollars flow into the digital currency market each year, making it a tool for capital mobilization, investment, and borderless transactions. Countries like the U.S. have legitimized digital currency within their financial systems, while Singapore has established itself as a regional blockchain hub with flexible legal policies. This is no longer a story of the future but a current reality, forcing every economy to adapt or be left behind.
Vietnam, in this global landscape, is emerging as a promising hotspot. According to the Vietnam Blockchain Association, about 21% of the population – equivalent to tens of millions of people – own digital assets, placing Vietnam among the top three countries in terms of participation. The $120 billion flowing into the digital currency market in 2023, as reported by Chainalysis, is evidence of the strong appeal of this wave. Vietnamese people not only invest but also innovate, with numerous blockchain projects initiated from major cities like Hanoi and Ho Chi Minh City.
However, this impressive position comes with a paradox: Vietnam lacks any legal framework to manage digital currency. While laws only recognize cryptocurrencies tied to fiat currency, such as e-wallets or bank cards, virtual currencies remain outside regulatory control. Domestic blockchain businesses are forced to register abroad – typically in Singapore or the U.S. – to operate legally, resulting in massive financial resource leakage. Citizens, despite their enthusiasm for participation, face risks from scams to asset loss without any protection. This reality has placed Vietnam at a crossroads: either build a legal foundation to exploit potential or let opportunities slip away to international competitors.
Legal Framework for Digital Currency Following the Prime Minister’s Directive
Recognizing the importance of digital currency, Prime Minister Phạm Minh Chính has taken decisive action through Directive 05 on March 1, 2025. With clear instructions, the Ministry of Finance – the lead agency – along with the State Bank of Vietnam, has been tasked with completing the legal framework for managing digital assets by March 31, 2025. This is an unprecedented “sprint” timeline, reflecting the determination to bring digital currency from a legal gray area into official orbit, turning it into a new economic driver.
This legal framework will not merely name virtual currencies but aim to build a comprehensive management system. Key contents include identifying digital assets, establishing valuation methods, and setting regulations for transactions and taxes. A notable highlight is the proposal for a sandbox mechanism – a controlled experimentation model – to develop digital asset exchanges, allowing Vietnam to test modern financial initiatives without significant risk. Additionally, the Prime Minister has laid the groundwork for a longer-term plan, requiring the development of comprehensive policies on digital assets by the end of Q2/2025, ensuring sustainable development in the future.
This directive is a strong signal, not just legally but strategically. With a very short deadline and high pressure, the Government is sending a message that Vietnam not only wants to keep pace but also lead in the global digital economic wave.
Impact of the Legal Framework on Vietnam’s Economic Future
The legal framework for digital currency, as directed by the Prime Minister, promises to bring about profound changes for Vietnam’s economy. First, it will promote the development of the digital economy – an increasingly important pillar in the context of globalization. Once virtual assets are identified, businesses can utilize them as a new source of capital, from bank loans to investment calls, rather than relying entirely on traditional channels. The $120 billion, instead of flowing abroad, will be retained domestically, becoming a resource to invest in technology, production, and infrastructure – from 3,000 km of highways to Long Thanh Airport.
Second, the legal framework will enhance national competitiveness. With 21% of the population familiar with digital currency, Vietnam has the advantage of a young, dynamic population to build a strong digital financial ecosystem. If implemented effectively, the country can attract international blockchain investment funds, competing with Singapore and becoming a new regional financial hub. This will not only bring in capital but also boost the development of domestic technology sectors, from software to blockchain research.
Finally, the legal framework will bring direct benefits to citizens and small businesses. More transparent digital currency transactions will reduce scam risks, encouraging the middle class and startups to participate in the digital economy. This is a step towards democratizing finance, bringing digital currency from the realm of tech enthusiasts to everyone’s hands, contributing to the goal of achieving an 8% GDP growth in 2025 and beyond to double-digit growth in the next decade.
Opportunities and Challenges from Digital Currency in the Future
Digital currency, with a legal framework as its foundation, opens many opportunities for Vietnam. Economically, it can become a new driver, contributing directly to GDP through technology, trade, and service sectors. A developed digital financial ecosystem will create more jobs, especially for young people under 35 – a demographic prioritized in government credit policies. Moreover, a transparent legal framework is an invitation to foreign investors, helping Vietnam assert its pioneering position in the global digital economy, surpassing regional competitors like Thailand or Indonesia.
However, the challenges are not small. The inherent volatility of digital currency is a latent threat – Bitcoin’s price once dropped by 50% in just a few months, and without strict control mechanisms, businesses and citizens could suffer significant losses. Financial risks do not stop at price fluctuations but also include illegal activities like money laundering or fraud, which are global headaches. The legal framework developed in March, with an overly short timeframe, may not be sufficient to address these complex issues, requiring the Government to make continuous adjustments in the future.
Additionally, Vietnam lacks experience and infrastructure to manage digital currency comprehensively. While countries like Singapore have a complete blockchain ecosystem, Vietnam needs time and resources to catch up. If it does not invest adequately in technology and human resources, the legal framework could be “new bottle, old wine,” insufficient to compete internationally.
The legal framework for digital currency, as directed by the Prime Minister, is the key for Vietnam to exploit the potential of virtual assets and shape its economic future in the digital era. While it offers significant opportunities for growth and integration, it also poses challenges in management and competition. Blockchain Bulletin Weekly believes, With strategic vision and Government determination, digital currency can become the driving force that propels Vietnam forward, turning potential into real strength.