These developments are noteworthy in that new rules and regulations around Vietnam’s digital asset exchange project have been coming thick and fast in recent months, but clear gaps in policy objectives and realities remain.
Vietnam’s State Securities Commission has said that investors holding cryptocurrency offshore can continue to do so when a domestic exchange becomes available, but they will not be able to trade it, Tuoi Tre has reported.
However, transactions involving existing assets can only be conducted through licensed Vietnamese virtual asset service providers, the SSC’s deputy head, To Tran Hoa, told a conference last week
He went on to say that the first trades are expected to take place six months after the first exchange is licensed, though only domestic investors who already hold digital assets will be able to participate, with no new domestic accounts to be opened.
Foreign traders, however, will not face the same restriction
These developments are noteworthy in that new rules and regulations around Vietnam’s digital asset exchange project have been coming thick and fast in recent months, but clear gaps in policy objectives and realities remain.
Liquidity in particular is likely to be problematic with only limited domestic traders, which is likely to make the exchange less attractive to foreign digital asset investors.
This may be further exacerbated by these recently announced regulations in that, if local traders are not forced to move their assets home — which would be difficult to enforce anyway — there is a good chance they simply won’t.
Moreover, it’s not clear how the SSC will monitor what they do with these assets on other exchanges, either.
This is all the more interesting in that, to establish a local digital asset trading exchange, the government has set a minimum contributed capital requirement of VND 10,000 billion (US$380 million).
Of course, a number of big foreign exchanges have reportedly expressed an interest in the project, ByBit, for example, last week.
However, whether that turns into actual capital being contributed remains to be seen. It seems more likely these firms would be looking at providing ancillary support, technical expertise, software, hardware, or general guidance, for example.
Generally speaking, there have been broad doubts about this project from the start, with the authorities focused on finding a way to control (and tax) trading, rather than user experience.
What the authorities want to happen and what is actually likely to happen, however, are growing further and further apart.