The potential of the blockchain and cryptocurrency

DNHN - Globally, the cryptocurrency market has seen significant growth. In Vietnam, despite not being officially recognized, cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Ripple have emerged and are actively traded.

Global blockchain market

Cryptocurrencies originated and developed in the 1990s, but only started gaining significant traction in 2010 with the creation of Bitcoin by the pseudonymous Satoshi Nakamoto. Since then, the crypto market has seen impressive growth. As of April 4, 2024, the total capitalization of digital currencies stands at approximately $2.6 trillion. Projections from Ripple’s CEO suggest this figure could double to $5.2 trillion by year-end. This vibrant market is expected to experience substantial growth as we approach the end of 2024.

On a global scale, the market for tokenized real-world assets is projected to reach $16 trillion—equivalent to 10% of the global GDP—by 2030, according to a report from the Boston Consulting Group. Standard Chartered further predicts this market could double to $30 trillion within the following four years.

In Vietnam, cryptocurrencies first appeared in 2011, initially through individual Bitcoin investments on international exchanges. However, Vietnam has yet to establish specific regulations or a legal framework for managing cryptocurrency transactions. The State Bank of Vietnam (SBV) does not recognize cryptocurrencies as a legitimate form of payment, nor does the Ministry of Industry and Trade consider them goods or services, and the Ministry of Justice does not classify them as assets. The Civil Code of 2015 also lacks specific provisions on virtual or electronic assets, and current banking and financial legislation has no rules for managing this form of digital payment. The SBV cautions that using Bitcoin as a means of payment is neither recognized nor protected by Vietnamese law.

Despite the lack of official recognition, several cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and Ripple have emerged and are being traded in Vietnam. They are becoming recognized as assets, payment methods, investment tools, and capital-raising methods in the country. Statistics from Statista in 2022 indicate that Vietnam ranks 7th out of 10 countries in terms of cryptocurrency usage or ownership. Vietnamese users consistently rank first in terms of cryptocurrency acceptance according to a 2022 Chainalysis report. However, the absence of a comprehensive legal framework has led to numerous issues related to cryptocurrency transactions, particularly fraudulent activities that harm financial consumers.

Vietnam’s position in the global landscape

According to the 2022 Vietnam Crypto Market Report, there are over 200 active blockchain projects in Vietnam, spanning various sectors with significant development in GameFi, DeFi, NFT, Web3, infrastructure, and wallets. Impressively, seven out of these 200 top global crypto enterprises were founded by Vietnamese entrepreneurs. Notably, these projects have introduced innovative community engagement approaches and received recognition and high evaluations from reputable news outlets in the Web3 and crypto sectors.

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According to MetaHub representatives, the company is among the first to integrate Generative AI into its products to address persistent market issues. MetaHub provides solutions that include Generative Artificial Intelligence, the MetaID identity system, and the Bot Mitigation and Anti-fraud System (BMAS). These technologies enhance customer experience, offer data-driven recommendations, foster innovation and creativity beyond traditional marketing methods, provide a safe environment for users to make informed decisions, help businesses access potential customers, and increase marketing efficiency in terms of time and cost.

Additionally, the company is promoting the digitization of decentralized transactions and empowering users with contactless, simple, convenient, and secure digital payments through partnerships with payment platforms like Alchemy Pay and global financial organizations like Mastercard. The processing will be entirely launched via API integrated with AI Analysis to ensure seamless transactions.

Vietnam’s regulatory landscape

In an interview with thanhnien.vn on May 14, 2024, Associate Prof., PhD Tran Hung Son from the University of Economics and Law commented that, while not yet legally recognized, cryptocurrencies have become valuable assets, payment tools, investment instruments, and funding avenues for many Vietnamese. The absence of a regulatory framework has hindered efforts to manage cryptocurrency-related activities, leading to tax revenue loss and an increase in fraud-related legal issues. Dr. Son suggests that Vietnam should first include cryptocurrencies in a controlled pilot regulatory framework for fintech in banking or create specific regulations for digital currencies.

"Overall, countries vary in their approaches to developing legal frameworks for cryptocurrency. Vietnam has shifted from a 'wait and see' approach to actively researching and preparing to build regulatory measures. Vietnam should classify digital currencies based on their economic functions—whether as payment instruments, investment/securities tools, or utility tokens. By categorizing based on economic function, we can create suitable regulations. The framework for managing digital currencies should be straightforward and flexible, avoiding overly complex requirements," said Dr. Son.

Cryptocurrencies are a legally unrecognized investment in Vietnam, carrying high risks, with no dedicated regulatory body or laws to protect investor rights. Potential investors are therefore advised to carefully evaluate legal, market, and technological risks before deciding to invest in or trade digital assets

Van Nguyen