Vietnamese banks get ready to join crypto asset market

Vietnamese banks get ready to join crypto asset market

The newly issued Law on Digital Technology Industry will take effect from January 1 and is considered an important milestone, ending many years of legal ambiguity on issues related to crypto assets.

Dunamu Group will support the Military Bank to establish a cryptocurrency exchange in Việt Nam. — Photo vnbusiness.vn

The Government’s plans to develop a legal corridor for crypto assets will open up opportunities for banks to participate in the potential market, industry insiders believe.

The newly issued Law on Digital Technology Industry will take effect from January 1 and is considered an important milestone, ending many years of legal ambiguity on issues related to crypto assets. The legislation also protects people holding crypto assets.

The Ministry of Finance is also developing a draft resolution on piloting the issuance and trading of crypto assets in Việt Nam that is due to be issued this month.

According to the draft, organisations operating digital asset trading floors must have minimum capital of VNĐ10 trillion. At least 35 per cent of this capital must be held by two or more institutions in five sectors (banks, securities companies, fund management companies, insurance companies or technology companies) and the remaining 65 per cent owned by organisations, not individuals.

Deputy Director of the State Securities Commission’s Securities Market Development Department Tô Trần Hòa said that the crypto asset exchange was a completely new market, requiring a solid foundation in terms of financial capacity, technology and management.

"The five groups of institutions currently have the necessary systems, experience and capacity to support the market to operate quickly, without having to spend more time testing," Hòa said.

This regulation works behind the scenes to create advantages for financial institutions with the potential to participate in the market, particularly for banks. Currently, there are 21 Vietnamese banks with charter capital exceeding VNĐ10 trillion.

Vietnamese banks have begun to prepare to enter this market. Some giants in the banking industry have expressed interest in piloting a crypto asset exchange in Việt Nam, and said they would be ready to participate as soon as crypto assets are recognised with a clear legal corridor.

Dunamu Group, which is the operator of Upbit, the largest cryptocurrency exchange in South Korea, signed a memorandum of understanding (MOU) with the Military Bank (MB) on supporting the establishment of a cryptocurrency exchange in Việt Nam.

According to Vice Chairman of MB's Board of Directors Vũ Thành Trung, the bank is expanding its ecosystem to the digital asset business and cooperating with the world's top three partners in this field.

MB is a bank with good technological capacity, more than 2,000 technology engineers and large investments in the platform. Expanding into the digital asset business is inevitable, so that MB's 33 million current customers have full options when using the bank’s ecosystem, not only stopping at banking services but also expanding to fund certificates, stocks, bonds and moving towards digital assets.

A number of other large private banks also plan to participate in the digital asset market. Techcombank, for example, has mentioned the issuance of digital assets at the bank’s annual general meeting of shareholders this year.

When asked by shareholders whether the bank would issue digital assets, open a digital exchange or join the blockchain game, Hồ Hùng Anh, Techcombank’s Chairman of the Board of Directors, confirmed that this would be an important strategy of many financial institutions, including Techcombank.

According to Anh, if the opportunity opens up and the market allows, Techcombank will participate in owning a crypto asset exchange.

Sharing the same view with Techcombank, a VPBank representative also confirmed that the bank would participate in the digital asset market, although this activity is very new and has many potential risks.

General Director of VPBank Nguyễn Đức Vinh said that the bank was ready to participate in the digital asset market and was in the process of undertaking thorough assessment and analysis. It was also in contact with partners while waiting for approval from relevant authorities, Vinh said.

However, he added that the issue of digital assets needed to be carefully assessed and shareholders would be informed at the appropriate time.

According to a Triple-A report, about 17 million people in Việt Nam currently own crypto assets, accounting for 17.4 per cent of the population and ranking seventh in the world in 2024. Meanwhile, the current flow of crypto assets into Việt Nam is about US$100-120 billion, with about 20 million Vietnamese people owning crypto assets.

In 2023 alone, Vietnamese investors earned about $1.2 billion in profits from bitcoin and other cryptocurrencies, ranking third globally after the US and UK.

Experts say that the emergence of a new legal corridor, along with moves from major banks, is opening a new development phase for the digital asset market in Việt Nam. However, participating in this field requires caution and a long-term strategy, to both exploit opportunities and control potential risks. 

Bizhub