Vietnam’s National Assembly has just adopted the Law on Digital Technology Industry. This historic ruling clears the path for smart regulation of crypto assets, luring foreign investment and fostering the development of homegrown digital startups. The new law promises to usher in significant changes to Vietnam’s rapidly evolving digital landscape. Second, it seeks to provide a robust and uniform legal framework for the ever-expanding digital economy. They represent a good device in general for safeguarding crypto assets and doing it in an effective way. This ambitious step is intended to draw foreign investment while nurturing local digital businesses as well.

Vietnam now has a historic opportunity ahead of it as it moves to legalize and regulate crypto assets. The country has remained on the Financial Action Task Force (FATF) “gray list” since 2023. Vietnam intends to impose tougher rules on digital products. This step will help provide clear checks on oversight and accountability mechanisms and meet the FATF’s conditions for removal from the list. Seen against this backdrop, the new law illustrates the country’s commitment to getting off the FATF “gray list.” It seeks to make the nation a principled and accountable participant in the international financial system.

Incentivizing Digital Innovation

As currently written, the Law on Digital Technology Industry contains targeted provisions meant to incentivize favored companies operating exclusively within the (very limited) core sectors of digital technology. Deliberately designed to promote accelerated innovation and expansion within the industry, these incentives are intended to match the rapid market growth. Vietnam is promoting a new legal framework for fostering innovation for both startups and proven tech companies. We are positive that this initiative will accelerate the pace of technological innovation and grow the economic pie.

The incentives are expected to push companies to devote additional resources to research and development. Because of that, they will innovate breakthrough new solutions and deliver them with speed and impact. Under this new initiative, Vietnam hopes to draw in greater numbers of foreign tech firms. Their presence will provide a tremendous catalyst to develop the country’s digital economy. By putting all their focus on innovation, Vietnam is establishing itself as the center of technological advancement in Southeast Asia.

Digital Identity Initiative

A digital identity initiative is expected to be at the core of it. This initiative has the potential to vastly simplify processes, improve security, and provide new and better ways to deliver public services. Now, more than ever, we need to lay the groundwork for a strong digital identity framework. Together, this will enable a smart, seamless and secure digital experience for citizens and businesses alike.

The digital identity program will make it easier, more secure, and safer to conduct transactions online, access government services, and secure personal data. This will improve public administration’s effectiveness. It will go a long way towards establishing greater trust and confidence in the digital economy. By placing digital identity at the forefront, Vietnam is setting the stage for a smarter and more digital society.

Regulations on Crypto and Virtual Assets

Prior to passing the Law on Digital Technology Industry, Vietnam had laid down transparent legal foundations. These mutual evaluation rules established operating business standards and conditions, along with licensing requirements applicable to cryptocurrencies and virtual asset classes. These regulations are intended to establish a transparent and predictable regulatory environment for firms engaged in the crypto industry. This proactive approach will help local governments responsibly manage the growth of the digital asset market while protecting investor interests. It sets the bar in line with international norms for adopting best practice.

The current rules cover all sorts of activities. This has included crypto exchanges, virtual asset service providers, and initial coin offerings (ICOs). By implementing more precise regulations and licensing obligations, Vietnam wants to secure investors while disallowing money laundering schemes and enhancing the overall market integrity. This regulatory framework would be a great move in creating a sustainable and reliable crypto environment in Vietnam.

"This law is designed to protect users, promote transparency, and create a legal foundation for a responsible digital economy in Vietnam." - National Assembly spokesperson