Vietnam Approves Cryptocurrency Pilot Program

Vietnam has approved a five-year pilot program for crypto-asset trading, allowing local companies to operate in this field, while imposing significant restrictions for investors. While the recent volatility in the markets has increased investor interest, this new development is attracting attention.

Bloomberg reports that the program, adopted by the Vietnamese government, states that only Vietnam-based companies can operate a crypto trading platform. This, combined with the mandatory issuance, trading and payment of all issuance, trading and payment transactions in the national currency, the Vietnamese dong, could change market dynamics.

While allowing foreign investors to participate in this market is an important step for Vietnam, foreign ownership is limited to 49%. This regulation increases the control of local companies, while at the same time opening the door to outside capital. At the end of the six-month transition period for cryptocurrency exchanges to obtain a license, Vietnamese investors who trade on unlicensed platforms will be considered in violation of the law.

This pilot program shows that the Vietnamese government aims to ensure market control and protect investors from potential risks. The most notable detail of the new regulation is the requirement that all crypto transactions must only take place in Vietnamese dong. This is an important strategy to strengthen the position of the country's currency and reduce the risk of possible dollarization.

This regulation, which prioritizes local companies, reveals that the Vietnamese government aims to retain strategic control while encouraging capital inflows. Rather than adopting a completely prohibitive approach to cryptocurrency, Vietnam has chosen to create a regulated and controlled market.