Vietnam plans to ban overseas crypto platforms and launch local exchanges. Five firms passed screening as adoption crosses $200B yearly volume.
Vietnam plans to block citizens from trading on overseas crypto platforms under new rules. The government also wants to try placing local crypto exchanges through a pilot program. The plan may begin soon, officials said. The move comes while trading in crypto is rapidly increasing in the country.
Vietnam Plans Ban on Foreign Crypto Exchanges
According to Reuters, Vietnam’s Ministry of Finance prepared a document about new crypto rules. The draft proposes a ban on trading on foreign apps like Binance and OKX. Instead, the authorities want users to only trade on the approved local exchanges.
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Officials believe that local platforms will enable better control over trading of digital assets. Therefore, the government intends to set up a pilot program for licensed exchanges. The program could begin this month if approvals can be made on time.
The document also revealed that five companies passed in the first qualification round. These firms will participate in the testing phase if the pilot program proceeds. The government said that more checks will occur before final approval.
Among the selected companies are affiliates of Techcombank, VP Bank and LP Bank. In addition, brokerage VIX Securities and the Sun Group have also passed the first review. These companies are huge financial groups in Vietnam.
Sun Group and VPBank confirmed that they applied for licenses. However, the other firms were not public in their comments. A spokesperson from the finance ministry said work was still in progress. The ministry also refused to discuss information about the applicants.
Strong Crypto Adoption Pushes Government to Act
Vietnam has emerged as one of the fastest-growing crypto markets in the world. Data from Chainalysis reveals the country is at #4 globally in terms of crypto adoption. This ranking indicates a gut interest by the end users (both retail users and businesses).
Reports also indicate that the annual crypto trading volume in Vietnam is more than $200 billion. Because of this huge activity, the regulators want stronger rules for the market. Officials say the new system will help to prevent fraud and illegal trading.
Authorities also want to make sure that crypto platforms comply with local laws. Foreign exchanges do not always take place with the complete approval of Vietnam. Therefore, the government believes local exchanges will provide a safer experience for the users.
At the same time, officials do not consider stopping crypto trading entirely. Instead, the task is to create a controlled system with licensed companies. The pilot program will be helpful to the government to study the working of the regulated exchanges.
Experts say the decision demonstrates a new approach to crypto regulation. Some countries opt for total bans, while others develop rules for legal trading in them. Vietnam seems to prefer controlled growth rather than blocking the market.
But if the pilot program is to be successful, more companies may be licensed in the future. This could bring a legal crypto market into the country. As the growth of the digital assets industry continues, Vietnam wants to be active while remaining in control of the industry.
