Vietnam has cemented its position as one of the most dynamic cryptocurrency markets globally, with digital asset inflows exceeding $100 billion annually between 2022 and 2024. The country now ranks as the second-largest crypto market by user base, with approximately 21.2% of its population holding digital assets. However, the absence of a structured regulatory framework continues to cast uncertainty over the industry, leaving investors vulnerable and the government unable to tap into its tax revenue potential.
The Cost of Regulatory Ambiguity
Despite the remarkable rise in cryptocurrency adoption, Vietnam’s lack of legal recognition for digital assets has led to significant economic and security concerns. Without a defined tax structure, the government has missed out on substantial revenue from crypto transactions. Additionally, the absence of investor protection has exposed users to widespread fraud, with the National Cybersecurity Association reporting that Vietnamese citizens lost an estimated $756 million to online scams in 2024.
Regulatory ambiguity has also driven many promising crypto startups to seek friendlier business environments in jurisdictions such as Singapore. The migration of these high-potential firms represents a lost opportunity for Vietnam to nurture a competitive domestic crypto sector.
Calls for a Regulatory Framework Intensify
Recognising the urgency of the situation, Vietnam’s top policymakers have pushed for regulatory action. In February, Party General Secretary To Lam stressed the importance of regulating cryptocurrencies to mitigate financial and social risks while leveraging their economic potential. He backed the idea of a regulatory sandbox to facilitate controlled crypto trading platforms.
Subsequently, Prime Minister Pham Minh Chinh instructed the Ministry of Finance (MoF) and the Ministry of Science and Technology to finalise policies on digital assets and implement a regulatory sandbox. On March 1, he reinforced this directive by prioritising the development of a legal framework for cryptocurrencies, assigning the MoF and the State Bank of Vietnam to present a comprehensive proposal by the end of March.
Deputy Minister of Finance Nguyen Duc Chi has also indicated that the ministry will soon propose a resolution for a regulated crypto trading platform. The initiative aims to protect investors and enable businesses to legally issue digital assets for fundraising.
What a Regulatory Sandbox Means for Vietnam
A regulatory sandbox provides a controlled environment where fintech and crypto firms can test new financial services under regulatory supervision. This framework allows authorities to assess emerging technologies while maintaining market stability and safeguarding consumer interests.
For businesses, such a sandbox offers legal clarity and a structured space for innovation. Without clear regulations, crypto and fintech startups struggle to operate confidently, limiting their growth and investment potential. A sandbox addresses these concerns by offering a temporary framework to trial financial services before broader implementation.
Vietnam has previously attempted to introduce sandbox regulations, but none have been officially adopted. Notably, the 2024 draft framework excluded blockchain-related businesses, reflecting a cautious approach. However, in early 2025, a National Assembly draft resolution proposed a sandbox model explicitly covering crypto trading platforms and tokenised assets, marking a significant policy shift.
Balancing Innovation and Risk
Vietnam’s regulatory sandbox must strike a delicate balance between fostering innovation and mitigating financial risks. A well-structured framework would ensure market stability while encouraging growth, investment, and compliance within the evolving digital asset landscape.
Establishing a legal framework for innovation is crucial. Transparent regulations should enable crypto trading platforms, blockchain-based financial services, and tokenised assets to function securely under oversight, bolstering market integrity and investor confidence.
Additionally, cryptoassets present new avenues for fundraising and investment. The sandbox should facilitate initial coin offerings (ICOs) and tokenised securities, allowing Vietnamese businesses to access global capital markets and expand fintech enterprises and startups.
With millions of Vietnamese actively trading cryptocurrencies, investor protection must remain a top priority. The sandbox should incorporate strict anti-fraud measures, robust cybersecurity standards, and comprehensive investor education initiatives to ensure informed decision-making.
To further encourage participation, the regulatory sandbox could offer temporary exemptions such as relaxed compliance requirements and market access flexibility, lowering barriers for fintech firms. Incentives such as tax breaks and government-backed funding could also attract businesses to the Vietnamese market, fostering a thriving digital asset ecosystem.
A Pivotal Moment for Vietnam’s Crypto Future
Vietnam stands at a crucial turning point in its approach to digital assets. The market has evolved beyond the country’s existing regulatory framework, resulting in missed economic opportunities and capital flight to more crypto-friendly jurisdictions. However, recent government directives indicate a strong commitment to establishing a structured legal framework.
By drawing insights from countries that have successfully implemented regulatory sandboxes, Vietnam has the potential to design a model that fosters innovation while safeguarding stakeholders. Beyond regulatory reforms, a well-executed sandbox could position Vietnam as a regional leader in digital finance, aligning with its broader economic ambitions.
