The Impact of Vietnam’s Cryptocurrency Legalization on the Crypto Market
Vietnam’s cryptocurrency market has long been plagued by contradictions: over 17 million active users, annual trading volumes reaching the scale of hundreds of billions of dollars, yet transactions primarily flow through overseas platforms, with virtually zero tax collection and minimal legal protection for investors. The legalization efforts since 2025 are not merely about “giving the green light,” but rather a regulatory experiment centered on licensing access, with taxation and supervision capacity building as the foundation.
1. Legalization reshapes market structures by channeling gray-market transactions into licensed channels.
Vietnam’s “Digital Technology Industry Law” explicitly defines digital assets as property under civil law for the first time, effective January 1, 2026. The accompanying pilot decree sets extremely high thresholds: paid-in capital must reach 10 trillion VND (approximately $380 million), with a foreign ownership cap of 49%. As a result, platforms like Binance and Coinbase cannot obtain direct licenses and must enter via local joint ventures; smaller exchanges are excluded, while traditional financial institutions such as SSI Securities and CAEX under MB Bank become the first candidates.
By mid-2026, five institutions had passed the preliminary review, but none had officially received a license, resulting in a licensing gap during the transition period.（Vietnam crypto exchange）
2. Taxation logic will alter the flow of transactions.
The Ministry of Finance of Vietnam drafted new regulations in March 2026, proposing to prohibit domestic citizens from trading on overseas platforms while introducing a transaction tax ranging from 0.1% to 0.2% and a personal income tax of 5% to 10%. Based on an estimated annual trading volume of $100 billion, the transaction tax alone could generate approximately $1 billion in revenue.
According to Chainalysis data, the cryptocurrency trading volume in Vietnam from July 2025 to June 2026 reached $122.2 billion, with centralized exchanges accounting for approximately $69.9 billion. Once the “ban on overseas trading” policy is implemented, funds will be forced to flow back to a few licensed platforms, partially isolating the liquidity of the Vietnamese market from global order books and short-term reducing market depth and price discovery efficiency.
3. The path has referential significance, but its limitations are equally evident.
Vietnam has drawn lessons from Singapore and Hong Kong’s institutional-friendly approach, yet the issuance of licenses has been slow, with the first license still pending. Meanwhile, Vietnam’s P2P transactions are highly active, with Vietnam, Thailand, and the Philippines collectively recording 5.4 million small P2P transfers, accounting for 14.4% of the global total, while the combined economic size of these three countries represents only 2.5% of the global economy. Over 80% of domestic transfers are under $1,000, averaging just $618 per transaction. This habit of small, high-frequency transactions creates a mismatch with the compliant, large-scale scenarios of licensed exchanges. If compliance costs become prohibitively high, some demand may shift to more covert channels. Legalization does not automatically equate to market transparency—how well regulatory design aligns with actual behavior is the key.
Summary
The impact of Vietnam’s legalization does not lie in suddenly legitimizing the vast market but in using a high-threshold licensing system to attempt to bring offshore trading and taxation back onshore. Short-term liquidity fragmentation and platform gaps are inevitable; if the licensing system can operate smoothly around 2027, Vietnam has the potential to become the second Southeast Asian crypto market with institutional-level compliance infrastructure. The real test is whether regulators can strike a balance between anti-money laundering, tax enforcement, and innovation encouragement.