Vietnam Legalizes Crypto Assets Under New Digital Tech Law

Vietnam’s National Assembly has officially passed the Law on Digital Technology Industry, establishing the country’s first comprehensive legal framework for digital assets, including cryptocurrencies. Slated to take effect in 2026, the law marks a pivotal step in Vietnam’s digital transformation strategy and signals the government’s intent to align with international financial compliance standards.

A Two-Tier Classification for Digital Assets

The legislation introduces a clear distinction between “virtual assets” and “crypto assets”:

• Crypto assets refer to digital tokens secured by encryption technology, used for storing and transferring value.
• Virtual assets cover broader digital representations used for exchange or investment but not necessarily tied to cryptographic validation.

Securities and fiat currencies are explicitly excluded from these definitions.

Toward Global Compliance and FATF Removal

One of the law’s most strategic objectives is to support Vietnam’s removal from the Financial Action Task Force (FATF) gray list, where it has been placed since 2023. That designation has subjected Vietnamese financial institutions to increased scrutiny and regulatory friction, especially in international transactions.

The new legal framework adheres to anti-money laundering (AML) and counter-terrorism financing standards. It requires companies working with digital assets to implement strong cybersecurity protocols to combat fraud, identity theft, and illicit finance.

Legal Clarity After Years of Ambiguity

Until now, Vietnam’s crypto ecosystem operated in a regulatory gray area. The new law ends that uncertainty, offering legal recognition for crypto assets and setting the foundation for business licensing, taxation, and investment conditions in the digital sector.

A government spokesperson stated the law was crafted to “protect users, promote transparency, and create a legal foundation for a responsible digital economy.”

National Blockchain and Identity Infrastructure

The Ministry of Public Security is backing the shift through NDAChain, a state-run permissioned blockchain built using Proof-of-Authority (PoA). It integrates Zero-Knowledge Proof (ZKP) technology to ensure privacy in identity verification.

This is complemented by a national Decentralized Identifier (DID) system, which lets users control their identity information independently—part of Vietnam’s broader goal to build a secure, decentralized digital ecosystem.

Strategic Incentives for Web3 and AI Growth

Beyond crypto regulation, the law offers strong incentives for innovation in blockchain, AI, and semiconductors. This includes:

• Tax breaks and land-use benefits
• R&D funding support
• Accelerated licensing for experimental digital products

Sectors like AI data centers, blockchain infrastructure, and software production are designated as strategic under the law.

The law also mandates local governments to develop talent pipelines for the digital economy. This includes funding for education programs, cybersecurity training, and the integration of digital technologies in national curricula.

Vietnam and Crypto: So Far

Here are key points on Vietnam’s past with digital assets and crypto:

• High Adoption Rate: Vietnam consistently ranks among the top countries for crypto adoption (Chainalysis Global Crypto Adoption Index).
• Legal Status: Cryptocurrencies are not recognized as legal tender, but owning and trading them is not illegal.
• Payment Ban: In 2018, the State Bank of Vietnam banned the use of crypto as a means of payment.
• Blockchain Innovation: Vietnam is home to major blockchain projects like Axie Infinity, developed by Sky Mavis.
• Regulatory Plans: The government has shown interest in developing a legal framework for digital assets to manage risks and encourage innovation.
• Public Engagement: Crypto investment is popular among retail users, driven by remittances, inflation concerns, and tech-savvy youth.

Vietnam and neighbours

What Comes Next

While the law won’t take effect until 2026, it sends a clear message: Vietnam is positioning itself as a digital asset hub in Southeast Asia. With compliance pathways now clearer and government infrastructure support in motion, the move could attract international investors and foster local Web3 innovation.

Whether this results in Vietnam’s removal from the FATF gray list remains to be seen, but the regulatory groundwork is now officially in place.