What happened?
Vietnam has approved a five-year pilot program for cryptocurrency trading, marking a significant shift in the country’s previously tight control over the market. Under the new rules, only Vietnamese companies will be allowed to operate platforms, and all trading and payments of crypto assets must be settled in the local currency, the dong.
Who does this affect?
This decision primarily affects Vietnamese firms and investors in the global crypto market. The rules require that any exchange provider must have at least around US$379m in capital, with institutional investors contributing no less than 65%. It also affects foreign investors, as they can now participate in the Vietnamese market, but foreign ownership in trading platforms is capped at 49%.
Why does this matter?
This move matters significantly in terms of market impact. It opens up a new, regulated gateway for both domestic holders and foreign investors into a rapidly growing crypto market, which could stimulate economic activity. Moreover, the pilot program provides an opportunity to measure market behavior and assess the effectiveness of safeguards in place, potentially shaping future regulation of the crypto market in Vietnam and influencing other Asian economies testing formal frameworks for digital assets.