Vietnam’s crypto legalisation is a defining moment for the digital future

With the passage of the Law on Digital Technology Industry, set to take effect on 1 January 2026, Vietnam officially legalises the ownership and use of crypto assets. This finally ends years of legal ambiguity and gives an estimated 17 million Vietnamese crypto holders formal recognition and protection under the law.

Clarity at last for crypto assets

The new law introduces legal definitions for "virtual assets" and, crucially, "crypto assets" for the first time as the two main categories under “digital assets”.

“Crypto assets” is the primary category for cryptocurrencies with clear financial functions that operate on their own blockchains. These assets are defined as relying on encryption technology to validate transactions and ownership.

This means that popular cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) fit the "crypto asset" definition perfectly as they are considered to have financial functions and are based on cryptographic technologies. This classification gives millions of investors in Vietnam the confidence that these assets are no longer in a regulatory grey zone.

Meanwhile, “virtual assets” could be interpreted as including digital items like rewards points or gaming items that don’t primarily have financial functions. This separation is critical for creating targeted and effective regulation.

Stablecoins regulated separately

Importantly, the law excludes fiat-backed stablecoins and central bank digital currencies (CBDCs) from the crypto asset category. These will remain under the authority of existing financial and civil laws.

Stablecoins such as Tether and USDC have been some of the fastest-growing financial assets in recent years. Their values are pegged to a specific amount of a traditional government-issued currency like the US dollar or euro. They are thus digital representations of said currencies.

The new legislation explicitly states that this category is not considered a "crypto asset" or "virtual asset". Therefore, they are outside the scope of this specific law and will be regulated under a different framework governing payments and financial instruments. Hopefully, in the future, stablecoin clarity will allow businesses to incorporate stablecoin payments into their operations.

Opening the doors for crypto entrepreneurs

For crypto startups and developers, the impact is immediate. The law provides a clear framework to build and operate crypto businesses within Vietnam, aiming to reverse the trend of startups registering offshore in hubs like Singapore to find legal certainty. This opens up a massive domestic market that was previously informal.

By creating a regulated environment, the law gives local developers legal protection and allows for greater investor confidence, while offering existing exchanges a clear pathway to expand into the Vietnamese market. We can expect international exchanges to prepare for business operations in 2026 when the law takes effect.

A strategic win for Vietnam

At the national level, the new law provides conditions to formalise the US$105 billion blockchain market in Vietnam. The primary national goal is to bring a massive, untaxed "underground economy" into the formal sector. By regulating the industry, Vietnam can now monitor activity, generate significant tax revenue, and curb the capital flight that has occurred through offshore exchanges.

With this law, Vietnam is positioning itself as a serious contender alongside Singapore and Thailand for regional leadership as a crypto hub. With its young, tech-savvy population and a vibrant developer community, Vietnam now has the legal backbone to support its ambitions.

Story: Dr Jeff Nijsse, Senior Lecturer in Software Engineering, School of Science, Engineering & Technology, RMIT University Vietnam

Masthead image: Maximusdn – stock.adobe.com | Thumbnail image: Parilov – stock.adobe.com