Major Reforms in Vietnam's Encryption Asset Regulation and Tax System

For a long time, Vietnam's legal positioning on encryption currency has been unclear, and tax policies have also been in a gray area. However, this situation saw a significant turning point on June 14, 2025. The National Assembly of Vietnam passed the "Law on Digital Technology Industry," which for the first time included encryption assets into the national legal framework and implemented classified regulation, formally establishing its legal status and marking a milestone event in the country's encryption asset regulatory process.

The new law classifies digital assets into two categories: "virtual assets" and "encryption assets", excluding financial instruments such as securities and digital fiat currency, and authorizes the government to formulate implementation rules. The law also strengthens requirements for cybersecurity, anti-money laundering, and counter-terrorism financing, and is scheduled to take effect on January 1, 2026. Its core objective is to improve the relevant legal system, align with international regulatory standards, and help Vietnam to soon eliminate its gray list status from FATF.

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 policy from passivity to actively constructing a regulatory framework in recent years, it will compare this with the practices of other Southeast Asian and global countries in the field of cryptocurrency taxation and regulation. In addition, it will also look forward to Vietnam's strategies in balancing risk prevention and innovative development, predicting potential specific policies that may be introduced in the future and their potential impact 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 positioning on encryption was in a state of ambiguity. Initially, the government imposed strict restrictions and risk warnings primarily regarding its use as a payment method. In July 2017, the State Bank of Vietnam explicitly prohibited encryption such as Bitcoin from being used as a means of payment. In April 2018, the government called for strengthened management of activities related to encryption.

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

However, this ambiguous situation underwent a fundamental change on June 14, 2025. The National Assembly of Vietnam passed the landmark "Digital Technology Industry Law," which will officially take effect on January 1, 2026. This law clearly defines "digital assets" for the first time in Vietnam's legal system, dividing 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 still has one of the highest cryptocurrency ownership rates in the world, with about 20.95% of the population holding encryption assets and an annual influx of over $100 billion. At the same time, Vietnam is also facing the need to respond to international pressures regarding anti-money laundering and counter-terrorism financing. Therefore, legalization has become 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 simple risk prevention to actively embracing the opportunities brought by the digital economy, and is attempting to guide and regulate this emerging industry through the establishment of a sound legal framework.

2. The Shift in Vietnam's Cryptocurrency Regulatory Framework

Vietnam's official attitude towards the classification of encryption currencies has shifted, reflecting a significant change in its regulatory system. In the past, Vietnam's encryption regulatory system faced issues of incompleteness and passive responses, often employing a one-size-fits-all regulatory approach. However, with the rise of the global encryption currency wave and changes in Vietnam's leadership, the current encryption currency regulatory system is rapidly improving. It has not only formed a preliminary regulatory framework with division of labor but is also actively promoting discussions and implementation of several 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 Regulatory Framework

Vietnam's encryption regulatory framework has undergone a significant evolution from non-existence to existence, and from passive response to proactive guidance.

From 2016 to 2022, Vietnam's encryption regulatory system has evolved from non-existence to establishment, transitioning from a one-size-fits-all approach to a stage of exploration and research. In April 2016, a letter from the Ministry of Finance announced that cryptocurrency trading was not prohibited, but its classification was ambiguous. In July 2017, the State Bank of Vietnam explicitly prohibited the use of cryptocurrencies such as Bitcoin as a means of payment. In April 2018, the government called for enhanced management of activities related to cryptocurrencies. In May 2020, the Prime Minister instructed the State Bank to launch a pilot project to explore the use of blockchain in cryptocurrencies. In March 2022, the Vietnam Blockchain Association was established, becoming Vietnam's first legal entity focused on crypto assets. In the same year, Vietnam passed anti-money laundering legislation, which came into effect in 2023.

After 2023, especially following the changes in Vietnam's leadership in 2024, Vietnam's regulatory attitude towards encryption gradually softened. In February 2024, the Prime Minister 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," aiming to position Vietnam as a regional leader in blockchain innovation. In June 2025, the "Digital Technology Industry Law" was passed, establishing a tolerant and prudent regulatory framework to promote broader digital economy development.

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

2.2 Overview of the Current Regulatory Framework and Distribution System in Vietnam

The current encryption regulatory framework in Vietnam is mainly managed by various ministries, forming a "loose regulatory" pattern. Multiple key institutions, including the State Bank of Vietnam, the Ministry of Finance, the Ministry of Public Security, and the Vietnam Blockchain Association, collaborate to jointly 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 a regulatory sandbox mechanism and pilot projects. The government is discussing the establishment of regional and international financial centers, one key aspect of which is the introduction of controlled testing policies for financial technologies, particularly for business models involving encryption assets and cryptocurrencies. For example, Da Nang has been approved to trial a special mechanism, including a pilot project for using stablecoins for payments by international tourists.

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 supplementary role to the traditional financial system are important components of Vietnam's digital economy development.

While promoting innovation in regulatory frameworks, anti-money laundering and counter-terrorism financing compliance remains a core focus for Vietnamese authorities, especially after being placed on the gray list by the Financial Action Task Force (FATF). The passage of the "Digital Technology Industry Law" is an important measure for Vietnam to respond to FATF pressure. The law clearly requires all digital asset activities to strictly implement anti-money laundering and counter-terrorism financing measures to enhance security and transparency.

3. Vietnam Cryptocurrency Tax Policy and Its Latest Developments

The evolution of Vietnam's cryptocurrency tax policy has occurred almost simultaneously with the country's regulatory policies on cryptocurrency. In the early days, due to the vague and contradictory classification of cryptocurrency by Vietnamese authorities, the regulatory policies were rough and uniform, making taxation on cryptocurrency unrealistic. However, the rapid expansion of cryptocurrency trading volumes forced the government to confront its legal status, compelling Vietnamese authorities to conduct research on cryptocurrency. Especially entering 2024, the government has shown a greater 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. Although the Ministry of Finance's circular in 2016 does not prohibit cryptocurrency trading and defines it as "property" and "goods," it does not address specific tax regulations. The State Bank of Vietnam also clearly stated in its circular in 2017 that it does not recognize cryptocurrencies like Bitcoin as a means of payment, further exacerbating legal uncertainties and making it difficult for tax authorities to effectively tax cryptocurrency activities.

Compared to the clear stock trading tax system in Vietnam, activities in the encryption field have been exempt from tax obligations for a long time. This situation has made Vietnam a de facto "tax haven" in the encryption field, attracting a large number of encryption investors, but it has also resulted in a huge gap for the government in terms of tax revenue.

3.2 The new regulations outline a legal framework for taxation on encryption.

The "Digital Technology Industry Law" will officially take effect on January 1, 2026. This marks a key step for Vietnam in the area of cryptocurrency tax policy. Although it does not directly enact a cryptocurrency tax law, it lays the legal foundation for future taxation. This new legislation clearly defines "cryptographic assets" and "virtual assets" for the first time at the legal level. This milestone definition alters the previously ambiguous legal status of cryptocurrencies in Vietnam, paving the way for them to be regarded as legitimate property.

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

There are currently various discussions regarding the proposed tax rates. One suggestion is to levy a 0.1% transaction tax on cryptocurrency transactions, similar to stock trading. If cryptocurrencies are classified as investment assets, trading profits may be subject to capital gains tax like stocks or real estate. Businesses engaged in cryptocurrency trading may be required 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, as well as a withdrawal fee of 1-5% on profits for foreign investors, and to consider a 10% corporate income tax incentive for pilot exchanges, along with exempting digital asset transactions 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 shift from early vigilance and restrictions to the current active exploration and regulation. This change reflects a pragmatic balance between controlling financial risks and seizing opportunities for the development of the digital economy. The Vietnamese authorities have included blockchain technology, digital assets, and cryptocurrencies in the national strategic technology list, alongside cloud computing and artificial intelligence. This indicates that Vietnam regards digital assets as key elements in driving the country's digital transformation and economic growth.

Based on the current development trends and the government's clear signals, 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:

First, more regulatory details will be introduced and enforced. With the implementation of the Digital Technology Industry Law, more supporting regulations and guidelines will be issued, clarifying 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, in order to accumulate experience and improve the long-term regulatory framework, ensuring that innovation occurs under controllable risks.

Secondly, 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 regulations, clarifying the taxation methods, tax rates, and tax administration for various types of encryption activities.