Vietnam is strategically employing cryptocurrency regulation to address its standing with the Financial Action Task Force (FATF). Since 2023, Vietnam has been on the FATF's "gray list" due to shortcomings in its anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks. In response, the country has taken decisive steps to establish a comprehensive legal framework for digital assets, aiming to meet international standards, attract investment, and foster a regulated Web3 ecosystem.
On June 14, 2025, Vietnam's National Assembly approved the Law on Digital Technology Industry, a landmark law set to take effect on January 1, 2026. This law officially recognizes cryptocurrencies as digital assets, dividing them into two main categories: virtual assets and crypto assets. Crypto assets, which include tokens with financial functions like Bitcoin and Ether, will be subject to licensing, capital requirements, and Know Your Customer (KYC) rules. Virtual assets, such as in-game tokens or loyalty points, will face looser obligations. This distinction aims to balance innovation with regulatory control. The government will be in charge of defining business rules, licensing conditions, and oversight for digital assets.
The new legal framework includes strict provisions for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), as well as cybersecurity protocols to monitor and mitigate fraud and abuse. These measures are expected to improve Vietnam's FATF standing, potentially leading to its removal from the gray list. Removing Vietnam from the FATF gray list would enhance foreign investor confidence and unlock new funding channels.
Vietnam's approach differs from countries like El Salvador, which has adopted Bitcoin as legal tender. Instead, Vietnam is opting for a more cautious, infrastructure-first model, similar to regulatory regimes in Singapore, South Korea, and the UAE. This approach aims to build a healthy digital asset environment while mitigating speculative risks.
The Ministry of Science and Technology will lead the enforcement of the law, collaborating with the Ministry of Finance and the State Bank of Vietnam to ensure digital assets are managed in accordance with applicable international standards. The law also mandates the adoption of cybersecurity safeguards and anti-money laundering frameworks in line with international best practices.
Vietnam has a large and active crypto community, ranking among the top nations globally in crypto adoption. The lack of legal clarity has previously made it difficult for founders and investors to grow operations. The new law is expected to open up venture capital and institutional investment in local blockchain startups, promote Web3 talent retention, and attract global crypto players to Southeast Asia through regulated markets.
The enactment of the Law on Digital Technology Industry demonstrates Vietnam's commitment to addressing FATF concerns and fostering a transparent and regulated digital economy. By establishing a clear legal framework for digital assets, Vietnam aims to strengthen its financial system, attract foreign investment, and position itself as a leader in blockchain innovation in Southeast Asia.
