The Struggle of Vietnamese Crypto Startups and the Need for Regulatory Clarity
In 2024, a Vietnamese blockchain startup found itself in a difficult position: to be recognized as legal, it had to move its headquarters to Singapore. Founded by engineers who graduated from the Massachusetts Institute of Technology in the U.S., the company fully complied with international standards. However, due to the lack of a legal framework for cryptocurrencies in Vietnam, it could not even register a business there.
This situation is not an isolated case but part of a broader trend where crypto startups are relocating overseas to gain legal recognition. This shift is driven by an outdated mindset that suggests if something cannot be controlled, it should be banned. Despite being among the world’s top countries in cryptocurrency adoption, Vietnam has yet to establish clear regulations for digital assets.
According to Chainalysis, between 2021 and 2023, Vietnam consistently ranked in the global top five for cryptocurrency adoption, surpassing even developed markets. Millions of Vietnamese citizens own digital assets like Bitcoin and Ethereum. However, without a clear legal framework, these investors and startups operate in a legal gray zone.
The government neither bans nor acknowledges crypto, leaving both investors and startups in a precarious position. Without regulatory clarity, authorities are forced to apply outdated laws to manage emerging risks. The State Bank of Vietnam has repeatedly warned against using crypto for payments, but transactions continue in the shadows, often without consumer protection, tax oversight, or accountability.
As of mid-2025, there are still no regulations classifying cryptocurrencies as assets, legal tender, or securities. This absence of regulation has significant consequences: investors who lose money cannot seek legal recourse, startups cannot open bank accounts, and the government collects no tax on billions of dollars worth of trading.
Meanwhile, countries with similar governance profiles have taken steps to create a more supportive environment for crypto. Singapore, for example, took early action by passing the Payment Services Act in 2019, which licenses crypto exchanges under a regulatory sandbox. These businesses must meet anti-money laundering standards, ensure consumer protection, and securely store digital assets.
This forward-thinking approach has made Singapore a digital asset hub in Asia. Major players like Binance, Coinbase, and Ripple have opened offices there, while local companies benefit from better access to capital and global partnerships. Most importantly, both investors and consumers enjoy legal protection.
The UAE followed a similar path. In 2022, Dubai launched the Virtual Assets Regulatory Authority to oversee crypto-related businesses. Rather than banning crypto, the UAE created a robust framework that supports innovation while maintaining close oversight.
In Brazil, the world’s seventh-largest crypto market, lawmakers passed a bill in 2022 recognizing digital assets like Bitcoin as financial instruments. The securities regulator issued guidelines for token issuance, and the central bank is piloting a digital currency called Drex. Brazil now attracts significant fintech investment while also maintaining control over the flow of money.
Vietnam, however, continues to delay regulatory progress. Promising blockchain projects like Kyber Network, Coin98, and TomoChain, founded by Vietnamese, must register abroad to raise capital, even though their teams and operations remain in Vietnam. Innovation happens here, but the recognition, funding, and tax benefits go elsewhere.
So, what can Vietnam do? First, it must establish an official legal framework recognizing digital assets as a lawful asset class. These assets should be under government oversight to ensure accountability. Second, regulations must distinguish between various types of digital assets. Cryptocurrencies like Bitcoin differ from security tokens, stablecoins, and NFTs. Each has unique characteristics and risks that require tailored policies.
It makes sense to begin with those easiest to manage, such as fiat-backed stablecoins, through pilot programs. Third, the government needs to build institutional capacity. Currently, few state agencies have much expertise in blockchain or crypto. Vietnam should therefore invest in training civil servants, collaborate with universities and research institutions, and bring in international experts to ensure thoughtful, effective governance.
Fourth, any legal framework must prioritize transparency and investor protection. Crypto exchanges should be required to disclose risks, follow asset custody standards, and take responsibility for user losses. It should not be the case, as it is today, that “if you lose money, it’s your own fault.”
Cryptocurrencies are not a threat—they are a challenge but also an opportunity. If Vietnam can overcome its fear of the unknown, it can move from being a passive user of digital assets to a leader in the global crypto economy.
