Vietnam’s Law on Digital Technology Industry
On June 14, 2025, Vietnam’s National Assembly marked a pivotal moment in the country’s approach to digital assets by endorsing the Law on Digital Technology Industry, which is set to take effect on January 1, 2026. This legislation arrives as Vietnam strives to reshape its financial landscape, particularly following its inclusion on the FATF’s gray list in 2023 due to concerns over Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) practices.
Key Provisions of the Law
The newly established law defines and differentiates between crypto assets, such as Bitcoin and Ether, and virtual assets, which encompass non-financial digital items. Notably, it excludes Central Bank Digital Currencies (CBDCs) and traditional financial securities, allowing for a clearer regulatory framework. By implementing stringent identity verification, transaction monitoring requirements, and mandatory reporting, the legislation aims to prevent fraud within the burgeoning digital asset sector.
Alignment with International Standards
Vietnam’s initiative to regulate cryptocurrency aligns with its commitment to adhere to international standards set forth by the Financial Action Task Force (FATF), an organization that formulates policies to combat financial crimes globally. The FATF was formed in 1989 by the Group of Seven (G7) nations, incorporating advanced economies like the US, Canada, and Germany, and its guidelines support countries in establishing effective financial regulations. Falling short of these standards can result in countries being monitored closely or facing restrictions that can hinder investment opportunities.
In June 2023, Vietnam found itself on the FATF gray list as it recognized significant weaknesses in its AML and CFT frameworks, including inadequate supervision of its financial institutions and insufficient regulation of virtual asset service providers (VASPs). To improve this scenario, Vietnam is focused on fulfilling an FATF action plan aimed at fortifying its AML measures and enhancing oversight of financial operations. The objective is straightforward: to secure the country’s removal from this list and portray a stable financial environment conducive to foreign investments.
Impact on the Digital Economy
The Law on Digital Technology Industry is notable not only because it stands as the first standalone law for such a sector in the world but also because it reflects Vietnam’s aspiration to boost its digital economy significantly. Under this law, the government plans to foster the emergence of 150,000 digital tech businesses by 2035. It aims to do this through various incentives, including tax breaks for startups, specialized workforce training programs, and favorable immigration terms for foreign experts.
Moreover, the law establishes a risk-based regulatory framework for AI and cryptocurrency, encouraging innovation while maintaining necessary regulatory oversight. This includes a regulatory sandbox to test new technologies related to blockchain and digital finance, which could further enhance Vietnam’s position as a tech hub in Southeast Asia.
Addressing Fraud and Enhancing Transparency
Vietnam’s proactive legal measures respond directly to the concerns raised by the FATF. By recognizing crypto assets, the law eliminates ambiguities surrounding ownership and usage, thereby promoting transparency within the sector. It also ensures that cryptocurrency exchanges and wallet service providers operate under strict surveillance, which addresses the FATF’s critiques regarding customer due diligence and illicit finance prevention.
Recent high-profile fraud cases, such as the arrests related to a fraudulent crypto mining scheme in February 2025 and a deceptive cryptocurrency advertisement in December 2024, highlight the immediate need for these reforms.
The Law on Digital Technology Industry equips authorities with the necessary tools to confront digital asset fraud, ensuring compliance with international regulations to bolster Vietnam’s financial reputation.
Conclusion
As Vietnam navigates its path toward greater integration into the global economy, the new crypto law represents a vital component of its long-term strategy. It is set to enhance investor confidence and facilitate seamless interaction between traditional banking and cryptocurrency markets. Ultimately, with effective implementation and adherence to international standards, Vietnam aims not only to address FATF stipulations but also to reclaim its stature as a trustworthy, innovation-driven economy on the world stage.
