Vietnam "wields a knife" in overseas encrypted currency trading. Local companies compete for the first batch of licenses.

As the Vietnamese government prepares to take action against one of the most active cryptocurrency markets in the world, restricting people from trading on overseas platforms, domestic companies in Vietnam are rushing to launch the country's first licensed cryptocurrency exchanges. According to a government resolution issued in February this year, Vietnam plans to launch a pilot program for local digital asset exchanges as early as this month. This is part of a broader effort to strengthen regulation of cryptocurrency trading and capital flows. According to a Ministry of Finance document dated March 12, five companies have passed preliminary qualification checks. The document indicates that these five companies include three Vietnamese privately-owned banks - Techcombank, VPBank, and LPBank - affiliated companies, as well as securities company VIX Securities and one of Vietnam's largest private conglomerates, Sun Group. Sun Group and VPBank have confirmed that they have applied for licenses, while the other three companies have not commented. A spokesperson for the Ministry of Finance stated that the authorities are processing this matter but will not comment on specific applicants. Vietnam has now become one of the most active cryptocurrency markets in the world, ranking fourth in the Global Cryptocurrency Adoption Index compiled by blockchain data company Chainalysis last year. The index estimates that transactions involving Vietnamese traders exceeded $200 billion in the 12 months leading up to June of last year. With the increasing popularity of cryptocurrencies and stablecoins in the region, concerns about uncontrolled capital outflows in Vietnam have been growing. The Ministry of Finance is drafting new regulations to prohibit Vietnamese citizens from trading on overseas cryptocurrency platforms. Vietnam strictly controls cross-border capital transfers. Due to the small and underdeveloped corporate bond market, the stock exchange is still classified as an emerging market, and many domestic savers choose to invest their funds in gold or real estate. The price of gold in Vietnam is about 10% higher than the international benchmark, and the real estate market is prone to speculation, highlighting the limited investment options available to households. Although Vietnam does not explicitly prohibit owning cryptocurrency, digital assets are not recognized as legal tender or a lawful means of payment. Therefore, market participants indicate that most Vietnamese traders currently use overseas centralized exchanges such as Binance, OKX, and Bybit. Phan Duc Trung, chairman of the Vietnam Blockchain and Digital Asset Association, stated that successful domestic exchanges help keep trading fees within the country and support the development of Vietnam's digital financial services industry. He stated, "This not only helps increase national budget revenue but also promotes the development of the domestic digital economy." However, he also cautioned that the legal framework is still incomplete, especially in areas such as regulation, taxation, and risk management.