Major Reforms in Vietnam's Encryption Regulation and Tax System

For a long time, Vietnam's legal positioning on encryption currencies has been unclear, and tax policies have been in a gray area, leaving market participants facing many uncertainties. However, this situation saw a significant turning point on June 14, 2025. The National Assembly of Vietnam passed the "Digital Technology Industry Law," which for the first time incorporated encryption assets into the national legal framework and implemented classified regulation, officially granting them legal status, marking a milestone in the country's encryption asset regulation process.

The new law divides digital assets into two categories: "virtual assets" and "encryption assets," and empowers the government to formulate implementation rules while strengthening requirements for cybersecurity, anti-money laundering, and counter-terrorism financing. This law will take effect on January 1, 2026, aiming to improve the relevant legal framework, align with international regulatory standards, and help Vietnam quickly exit the FATF gray list.

This article will analyze the restructuring effect of this legislative breakthrough on Vietnam's digital economy landscape, interpreting the latest dynamics and future trends of its tax system. By reviewing the evolution of the Vietnamese government's policies from cautious observation to actively establishing a regulatory framework in recent years, a comparative analysis will be conducted with practices in the field of cryptocurrency taxation and regulation in Southeast Asia and other countries worldwide. Furthermore, it will also look ahead to Vietnam's strategies in balancing risk prevention and innovative development, predicting specific policies that may be introduced in the coming years, as well as the potential impacts of these policies on Vietnam as an emerging digital economy.

1. Vietnam Clarifies the Legal Status of Encryption Assets

Before the promulgation of the "Digital Technology Industry Law", Vietnam's legal position on encryption currency was unclear. Initially, the government mainly restricted its use as a means of payment and issued risk warnings. In July 2017, the State Bank of Vietnam explicitly prohibited encryption currencies such as Bitcoin from being used as a means of payment and emphasized their illegality. In April 2018, the government called for strengthened management of activities related to encryption currency.

Although the Ministry of Finance stated in April 2016 that it does not prohibit cryptocurrency trading and defines it as "property" and "goods," this directive has been controversial in practice due to the lack of clear legislative support. Furthermore, according to Vietnam's 2015 Civil Code, digital assets such as cryptocurrencies do not fall under the legally defined categories of assets, resulting in a significant legal gap.

However, this ambiguous status underwent a fundamental change on June 14, 2025. The National Assembly of Vietnam passed the landmark "Digital Technology Industry Law," which will take effect on January 1, 2026. This law for the first time clearly defines "digital assets" within the Vietnamese legal system and categorizes them into "encryption assets" and "virtual assets." This legislative breakthrough ends years of uncertainty regarding the legal status of encryption assets in Vietnam, officially recognizing encryption assets as legal property under civil law.

This strategic shift from "non-recognition" to "legalization" is not accidental. The Vietnamese government has recognized the enormous potential of the encryption economy. Despite regulatory obstacles, Vietnam has one of the highest cryptocurrency ownership rates in the world, with approximately 20.95% of the population holding crypto assets and annual inflows exceeding $100 billion. At the same time, Vietnam also faces the need to address international anti-money laundering and counter-terrorism financing pressures. Therefore, legalization is a necessary prerequisite for attracting investment, promoting the development of the digital economy, and effectively regulating this emerging industry. This indicates that the Vietnamese government has shifted from merely risk prevention to actively embracing the opportunities presented by the digital economy, and is attempting to guide and regulate this emerging industry by establishing a sound legal framework.

2. The Shift in Vietnam's Cryptocurrency Regulatory Framework

Vietnam's changing regulatory attitude towards encryption reflects a significant shift in its regulatory system. In the past, Vietnam's encryption regulatory system was inadequate, often employing a one-size-fits-all regulatory approach. With the rise of the global cryptocurrency wave and changes in Vietnam's leadership, the current encryption regulatory system is rapidly improving, having formed an initial division of regulatory responsibilities, and actively promoting multiple regulatory pilot projects, striving to effectively address challenges such as anti-money laundering and counter-terrorism financing while embracing new technologies.

2.1 Evolution of the Regulatory Framework

Vietnam's encryption regulatory framework has undergone a significant evolution from non-existence to a proactive guidance approach.

From 2016 to 2022, Vietnam's encryption regulatory system has undergone a transition from non-existence to establishment, from a one-size-fits-all approach to a stage of exploration and research.

In April 2016, the Ministry of Finance issued a letter that did not prohibit cryptocurrency trading, but its classification was vague. In July 2017, the State Bank of Vietnam explicitly prohibited cryptocurrency as a means of payment. In April 2018, the government required stricter management of activities related to cryptocurrency. In May 2020, the government began exploring the application of blockchain in cryptocurrency. In March 2022, the Vietnam Blockchain Association was established, becoming the first legal entity in Vietnam focused on crypto assets. In the same year, Vietnam passed anti-money laundering legislation requiring institutions providing payment services to implement customer due diligence measures.

After 2023, especially following the changes in Vietnam's leadership in 2024, Vietnam's regulatory attitude towards encryption gradually softened.

In February 2024, the government instructed the Ministry of Finance to draft a legal framework for virtual assets. In October of the same year, the government issued the "National Strategy for the Development and Application of Blockchain Technology in Vietnam 2025," aimed at making Vietnam a regional leader in blockchain innovation. The strategy clearly identifies blockchain as a core pillar of digital transformation and emphasizes "Vietnam-made" blockchain platforms.

In June 2025, the "Digital Technology Industry Law" was passed, establishing a tolerant and prudent regulatory framework to promote broader digital economic development from multiple aspects, including clarifying the classification of digital assets, mandating the implementation of anti-money laundering and anti-terrorist financing measures, and introducing a licensing system.

The maturation of the regulatory framework from "passive response" to "active guidance" is a key feature of Vietnam's policy evolution in the field of digital assets. This marks Vietnam's entry into a more mature and pragmatic stage in digital asset regulation, where the goal is no longer just to control risks, but to unleash innovative potential by establishing a clear and predictable legal environment, attracting domestic and foreign investment, and enhancing its position in the global digital economy.

Overview of the existing regulatory framework and division of responsibilities in Vietnam 2.2

Vietnam's current encryption regulatory framework is mainly managed by various ministries, forming a pattern of "loose regulation." Multiple key institutions, including the State Bank of Vietnam, the Ministry of Finance, the Ministry of Public Security, and the Vietnam Blockchain Association, work together to build and improve the regulatory framework.

2.3 Regulatory sandbox pilot and risk compliance construction under the new normal

In order to explore innovative applications of digital assets under the premise of controllable risks, the Vietnamese government has actively introduced regulatory sandbox mechanisms and pilot projects.

The Vietnamese government is discussing the establishment of regional and international financial centers, one key aspect of which is the introduction of a controlled testing policy for financial technology, especially concerning business models involving encryption assets and cryptocurrencies. For example, Da Nang has been authorized to trial special mechanisms, including a pilot project for international tourist payments using stablecoins.

In addition, Vietnam is actively exploring the research and development of central bank digital currency. Although the issuance of the digital dong is still in the evaluation stage, its potential legal status and complementary role to the traditional financial system are important components of Vietnam's digital economy development.

Of course, while promoting innovation in the regulatory framework, anti-money laundering and counter-terrorism financing compliance remains a core focus for the Vietnamese authorities, especially after it was placed on the gray list by the Financial Action Task Force.

The passage of the "Digital Technology Industry Law" is an important measure for Vietnam to respond to FATF pressure. The law explicitly requires all digital asset activities to strictly implement anti-money laundering and anti-terrorism financing measures to enhance security and transparency. This means that future encryption exchanges and related service providers must comply with global standards such as KYC and AML, and may be required to maintain compensation funds to protect users from cyber attacks, thereby reducing the risk of financial crime.

3. Vietnam Cryptocurrency Tax Policy and Its Latest Developments

The evolution of Vietnam's cryptocurrency tax policy has almost synchronously progressed with the country's regulatory policies on cryptocurrency. In the early stages, due to the Vietnamese authorities' vague and contradictory characterization of cryptocurrency, the regulatory policies were rough and one-size-fits-all, making it unrealistic to impose taxes on cryptocurrency. However, the rapid expansion of cryptocurrency trading volumes forced the government to confront its legal status, prompting Vietnamese authorities to conduct research on cryptocurrency. Particularly as we enter 2024, the government has shown a stronger urgency in establishing a clear legal framework.

3.1 Currently, cryptocurrency trading in Vietnam is still in a tax gray area.

For a long time, due to the lack of clear legal definitions and regulatory frameworks, cryptocurrency trading in Vietnam has been in a tax gray area. This situation has turned Vietnam into a de facto "tax haven" in the crypto space, attracting a large number of crypto investors, but it has also resulted in a significant tax gap for the government.

3.2 New regulations outline the legal framework for taxation of encryption.

The "Digital Technology Industry Law" will officially come into effect on January 1, 2026. This marks a key step for Vietnam in terms of cryptocurrency tax policy. Although it does not directly issue cryptocurrency tax laws, it lays the legal foundation for future taxation.

The Ministry of Finance is finalizing a draft resolution regarding a pilot program for the issuance and trading of cryptocurrencies. This pilot will assess the feasibility of applying value-added tax, corporate income tax, and personal income tax to cryptocurrency asset trading. The pilot program will be conducted on a small scale and will be closely monitored by national regulatory authorities to study how to determine the revenue from cryptocurrency assets, thereby establishing transparent regulations to avoid budget losses and protect investors' rights.

There are currently various discussions regarding the proposed tax rates. One suggestion is to impose a 0.1% transaction tax on encryption transactions, similar to stock trading. If cryptocurrencies are classified as investment assets, trading profits could be subject to capital gains tax like stocks or real estate. Businesses engaged in cryptocurrency trading may need to pay the standard 20% corporate income tax. Additionally, there are proposals to impose a 5-10% personal income tax on profits from non-fungible tokens and a withdrawal fee of 1-5% on profits for foreign investors, while considering a 10% corporate income tax incentive for pilot exchanges (for the first five years) and exempting digital asset trading from value-added tax to promote liquidity.

4. Outlook on Vietnam's encryption currency policy

The attitude of the Vietnamese authorities towards encryption assets has undergone a significant transformation from early caution and restrictions to positive exploration and regulation. This change reflects a pragmatic balance between controlling financial risks and seizing opportunities for the development of the digital economy. In fact, the Vietnamese authorities have included blockchain technology, digital assets, and cryptocurrencies in the national strategic technology list, alongside cloud computing and artificial intelligence.

Based on the current development trends and the clear signals from the government, there is reason to believe that Vietnam's future encryption asset policy will continue to exhibit characteristics of "inclusive prudence." Specifically, the following predictions can be made regarding the direction of Vietnam's future encryption asset policy:

Firstly, more regulatory details will be introduced and implemented. With the coming into effect of the "Digital Technology Industry Law", more supporting regulations and guidelines will be issued to clarify the licensing requirements, operational standards, consumer protection measures, etc. for encryption asset service providers. The regulatory sandbox will continue to play a role, providing a controlled testing environment for new business models and technologies to accumulate experience and improve the long-term regulatory framework, ensuring that innovation occurs under manageable risks.

Second, the tax framework will gradually improve and be implemented. It is expected that after the "Digital Technology Industry Law" comes into effect, the Ministry of Finance will accelerate the introduction of specific tax details, clarifying the taxation methods, tax rates, and administration processes for various types of encryption activities. The successful experience of the e-commerce platform tax system is likely to be introduced to encryption trading platforms to enhance tax efficiency and compliance. Vietnam may also formulate differentiated tax policies for different types of encryption activities and consider a combination of capital gains tax and turnover tax to achieve fairness and effectiveness in taxation.

Thirdly, digital assets will gradually integrate with the traditional financial system. The Vietnamese government will continue to promote the integration of digital assets with traditional finance.