As rapid grassroots cryptocurrency adoption continues to grow, Vietnam’s prime minister has called for new rules to regulate the country’s crypto sector.
At a discussion group on Monday, Vietnam Prime Minister Pham Minh Chinh said this was a necessary step partly because residents continue to trade digital assets despite their lack of legal recognition, online news outlet VnExpress reported.
Related: Vietnam, Philippines Top 2022 Crypto Adoption Index
The publication reported that Chinh said the country’s bill on Anti-Money Laundering, or AML, should recognize an amendment on virtual currencies given that “in fact, people still trade” crypto in Vietnam.
“It is necessary to study appropriate sanctions, and assign the government to make detailed regulations,” Chinh reportedly said.
Local lawmakers have been pushing the government to clarify its stance towards virtual assets and blockchain technology as the rate of crypto adoption grows. Vietnam currently does not recognize cryptocurrencies for payments, but as a form of investment, they sit in a legal gray area.
Last month, National Assembly delegate Duong Van Phuoc called for virtual assets to be included in a draft law, pointing out that large-scale gambling and money-laundering rings use them, Coindesk reported. The National Assembly is working with the Vietnam Blockchain Association on a proposal to tax virtual assets, as a first step towards recognizing virtual assets as property.
The web3 industry in Vietnam has remained vibrant and growing, despite the industry’s slowdown in what has been called a “crypto winter.” The sector has benefitted from factors that include rising smartphone penetration rates, growing digitalization across various industry verticals, increasing awareness of cryptocurrency and venture capital funding in blockchain technology companies.
Jinnie Lee, head of global partnerships, Klaytn Foundation, told Blockhead that market players are increasing their efforts to improve their services to ease the adoption of blockchain technology in Vietnam. The market is an important one for the layer 1 blockchain, which has its focus on gaming and the metaverse – two segments that are seeing strong interest among users and developers in the country.
“With a relatively young population, the country tends to be more open-minded to new technologies such as blockchain, allowing local startups in this space to develop rapidly. There is also a sizeable developer community in Vietnam, and developers tend to be eager to learn and open to trying out new chains,” Lee said.
Vietnam was the leading country on Chainalysis’ third-annual Global Crypto Adoption Index, published in September. Its high purchasing power in centralized, DeFi and P2P cryptocurrency tools was behind its strong showing.
The report also cited games like Axie Infinity and cross-border crypto transfer applications that are pushing “lower middle income” nations to global leadership in crypto adoption – Philippines and Thailand ranked second and eighth respectively, while Indonesia took 20th spot.