Digital Asset Exchange in Vietnam is Coming Soon

The early testing of a crypto asset exchange is considered a big step forward, opening up legal trading opportunities for people.

On August 1, Prime Minister Pham Minh Chinh signed Decision No. 1646/QD-TTg, officially establishing the Steering Committee for the International Financial Center in Vietnam, with the Prime Minister directly serving as the Head of the Steering Committee. On the same day, the Action Plan for the construction of the International Financial Center was also issued, with the goal of forming and putting into operation the centers in Ho Chi Minh City and Da Nang - two important economic locomotives of the country - by the end of 2025.

Big step forward for digital asset trading floor in Vietnam

In order to specify the above orientation, the Ministry of Finance has submitted to the Government a draft Resolution on piloting a crypto-asset trading floor at the International Financial Center, in which blockchain is identified as the core technology platform serving the operation and supervision of the trading system.

Under the draft, service providers will be given more autonomy in choosing which cryptocurrencies to list and trade. This flexible approach is expected to enable market participants to operate more proactively, dynamically and creatively.

Experts recommend that there should be a separate set of criteria to select coins that are eligible for listing, instead of letting businesses spontaneously create coins and then sell them everywhere. Photo: HOANG TRIEU

The launch of a crypto-asset exchange is considered a big step forward, opening up legal trading opportunities for people, but the risks related to security, technology, as well as the possibility of being lured by poor quality projects make many people cautious. Mr. Nguyen Hoang Nam, a cryptocurrency investor in Ho Chi Minh City, raised the question of whether if the exchange allows trading in all types of cryptocurrencies, will there be any protection mechanisms to prevent fraud or loss of assets?

That concern is not without basis. Because, a report from Ivy, a digital asset media company based in Vietnam, shows that nearly half of investors with income under 500 USD/month have lost money when participating in the cryptocurrency market. Specifically, 47.3% of the people in the survey group have lost money when investing in digital assets, mainly due to following trends and believing in "crazes" without understanding and risk prevention tools.

According to CoinMarketCap, the global cryptocurrency market currently has more than 19 million different types, with a total capitalization of up to 3,720 billion USD. Of which, Bitcoin holds the dominant position with more than 2,278 billion USD, followed by Ethereum, XRP, USDT, BNB and many others. However, not all of them are eligible to be included in the pilot list.

According to lawyer Dao Tien Phong, CEO of Investpush Law Firm, Vietnam needs to develop a set of transparent and strict criteria to screen and select digital assets that are allowed to be traded, in order to avoid the situation of "junk coins" dominating the market. He suggested referring to the process of listing shares on the stock market and in the early stages, focusing on coins with large capitalization and high liquidity such as Bitcoin or Ethereum.

According to Dr Jeff Nijsse - senior lecturer at RMIT University Vietnam, an expert on crypto assets - the promulgation of crypto asset law marks the end of the legal "grey" period.

"With about 17 million Vietnamese owning digital assets, this move is expected to have an immediate impact on the domestic technology startup ecosystem. The new law not only provides a clear framework for businesses to operate, but also helps limit the situation of technology companies registering their businesses abroad such as Singapore to seek legal security. Thanks to that, Vietnam can retain capital flows, generate tax revenue and better control digital financial activities," said the expert.

He also added that when the Law on Digital Technology Industry comes into effect, Vietnam is confidently entering the race to become the leading crypto asset center in the region, competing with countries like Singapore or Thailand. The dynamic developer community, the young, tech-savvy population, and now the appropriate legal foundation are all creating a solid tripod for that aspiration.

Need suitable design and high safety

Mr. Phan Duc Nhat, Chairman of Coin.Help & BHO.Network, believes that in the context of the increasingly expanding cryptocurrency market, an exchange designed to suit the needs of domestic investors not only needs to be safe but also practical, create sustainable profits and be aligned with national policy orientation.

According to Mr. Nhat, compliance with the law is a fundamental requirement. The exchange needs to be licensed by a competent authority such as the State Bank of Vietnam (SBV) or the Ministry of Finance, fully implement the Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, and closely coordinate with regulatory agencies in national pilot programs. Transparency in operations is a factor that builds trust with investors, while limiting potential legal risks.

In terms of technology, security must be a top priority. Digital assets should be stored in multi-signature cold wallets, incorporating two-factor authentication and early warning systems. Regular audits by independent entities are also necessary to patch security flaws in a timely manner, protecting users' assets.

In addition, user experience is also an important factor such as: friendly, easy-to-use Vietnamese interface; complete instructions from basic to advanced will help expand the number of users. "Flexible deposit and withdrawal methods via domestic banks or e-wallets such as MoMo, VNPay should be integrated. Along with that, incentive programs such as mini games, referring friends or giving NFT will attract new users" - Mr. Nhat suggested.

An effective exchange also needs to ensure high liquidity, competitive transaction costs, and diverse profit opportunities. Most importantly, it has a long-term and sustainable development vision. This is reflected in the establishment of an investor insurance fund, the application of environmentally friendly blockchain technology, as well as expansion into financial services such as lending and issuing crypto-linked credit cards.

"When these factors are realized, the crypto asset exchange in Vietnam will not only be a trading place, but also become a new driving force for the development of the national digital economy," the expert emphasized.

According to lawyer Dao Tien Phong, for the crypto asset market in Vietnam to develop sustainably, the first important thing is to build a separate set of criteria to select coins that are eligible for listing, instead of letting businesses spontaneously create coins and then sell them to investors. "Vietnam can refer to the strict management model in Hong Kong (China), with specific criteria such as the transparency of the issuer, liquidity, auditability and technical assessment of digital assets" - Mr. Phong suggested.

He also warned that Vietnam cannot become a "hot spot" for cryptocurrency fraud. Accordingly, in the initial stage, it is necessary to apply strict management measures such as KYC, anti-money laundering and terrorism financing prevention. Regarding the proposed personal income tax rate of 0.1% for crypto asset transactions, he said it is quite high, and it should be considered to reduce it to below 0.08% to encourage development when the market still has many potential risks. In addition, in the long term, businesses should be allowed to establish cryptocurrency exchanges based on a set of transparent, flexible standards that are in line with technological trends.

"Vietnam should implement a sandbox model (controlled experiment) to test new policies and products before widely applying them. Learning from the experiences of the US or Hong Kong will help Vietnam develop an efficient, safe and internationally competitive market," he said.

Changing the concept of "virtual currency" to "digital asset"

Speaking to a reporter from Nguoi Lao Dong Newspaper on August 6, Deputy Governor of the State Bank and Vice President of the National Cyber Security Association (NCA) Pham Tien Dung said that changing the term from "virtual currency" to "digital asset" is appropriate. Because this is an asset, not a currency. Because when using the concept of "currency", it will come with many binding regulations.

According to the State Bank leader, there are 3 most recent important events related to blockchain. In which, the National Assembly passed a Resolution on financial centers, including content on innovation, content on specialized exchanges including digital asset exchanges. The Law on Digital Industry and Technology was also passed, in which perhaps for the first time and also one of the few countries that has clearly defined digital assets, virtual assets and related issues to pave the way for legality.

Thai Phuong

According to the leader of a domestic blockchain company, to include a digital asset in the legal trading list, it is necessary to have minimum conditions such as large capitalization, a large number of holders, and a stable operating time of at least 5 years. At the same time, clearly classifying digital assets is also urgent to avoid confusion, creating loopholes for "herding chickens" or manipulating information.

Source: https://nld.com.vn/san-giao-dich-tai-san-so-da-rat-gan-19625080621135197.htm