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How will the ban on virtual assets affect the investment climate and business?
Vietnam's Finance Ministry has announced plans to ban or regulate virtual assets by May 2025. The decision of the authorities was part of efforts to combat money laundering.
The 17-point action plan aims to remove Vietnam from the "gray list" maintained by the FATF, an intergovernmental organization for combating money laundering founded by the G7 bloc. The FATF's "grey list" includes countries that have committed to removing obstacles in the fight against money laundering, terrorist financing and the proliferation of weapons of mass destruction. Being on the list implies increased monitoring for the country.
One of the points of the national plan of Vietnam provides for the development of a legislative framework for regulating or prohibiting virtual assets and service providers with virtual assets, as well as demonstrating the effectiveness of the application of regulations, including compliance measures.
Other points of the national anti-money laundering plan include strengthening cooperation on extradition, developing awareness-raising activities and guidelines for the private sector, and demonstrating improved monitoring of local financial institutions.
Currently, Vietnam has no legislation regulating the ownership, trading or use of virtual assets. Cryptocurrencies are not recognized as legal tender in the country, and transactions with cryptocurrencies are usually carried out through international trading platforms or direct agreements.
According to the global cryptocurrency adoption index from Chainalysis, Vietnam ranks second in the world. However, the country is seeking to gain prominence in other areas, such as becoming a center of the semiconductor industry, promising investment incentives for this and other technology industries.
Being on the FATF's "grey list" does not help attract foreign investors who choose a platform for investment. The Vietnamese authorities have been calling for cryptocurrency regulation for at least 2 years.
Vietnam is not the only country seeking to regulate virtual assets to meet FATF requirements. Last year, the Finance Minister of Pakistan stated that cryptocurrencies will never be legalized in the country for the same reason.
Vietnam's Finance Ministry has announced plans to ban or regulate virtual assets by May 2025. The decision of the authorities was part of efforts to combat money laundering.
The 17-point action plan aims to remove Vietnam from the "gray list" maintained by the FATF, an intergovernmental organization for combating money laundering founded by the G7 bloc. The FATF's "grey list" includes countries that have committed to removing obstacles in the fight against money laundering, terrorist financing and the proliferation of weapons of mass destruction. Being on the list implies increased monitoring for the country.
One of the points of the national plan of Vietnam provides for the development of a legislative framework for regulating or prohibiting virtual assets and service providers with virtual assets, as well as demonstrating the effectiveness of the application of regulations, including compliance measures.
Other points of the national anti-money laundering plan include strengthening cooperation on extradition, developing awareness-raising activities and guidelines for the private sector, and demonstrating improved monitoring of local financial institutions.
Currently, Vietnam has no legislation regulating the ownership, trading or use of virtual assets. Cryptocurrencies are not recognized as legal tender in the country, and transactions with cryptocurrencies are usually carried out through international trading platforms or direct agreements.
According to the global cryptocurrency adoption index from Chainalysis, Vietnam ranks second in the world. However, the country is seeking to gain prominence in other areas, such as becoming a center of the semiconductor industry, promising investment incentives for this and other technology industries.
Being on the FATF's "grey list" does not help attract foreign investors who choose a platform for investment. The Vietnamese authorities have been calling for cryptocurrency regulation for at least 2 years.
Vietnam is not the only country seeking to regulate virtual assets to meet FATF requirements. Last year, the Finance Minister of Pakistan stated that cryptocurrencies will never be legalized in the country for the same reason.
