Thanh Le, founder of Coin98, discusses Vietnam’s evolving digital asset regulations and how Coin98 is repositioning amid tighter oversight.
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This has been lightly edited for flow and consistency.
How did you sort of get into the industry, I guess, and when?
I started my career as an embedded system engineer and also started doing a couple of technology businesses before I got into crypto in 2017.
Initially, just like everyone else, I was interested in the asset itself first and then, when you’re already buying the assets and holding the assets, you start to do a lot more research.
And I started to think, ‘this is the future of finance tech,’ and that’s when I thought I would get into the market in 2017, and started to build Coin98.
Since then, we’ve become the biggest investor community in Vietnam, built crypto wallets in Southeast Asia, gained 10 million users across the world, and, during that time, we’ve developed a lot of educational content in Vietnamese, as well as developer communities.
I think the last two years I have had the opportunity to engage with a lot of government agencies, departments and authorities to contribute a bit to the politics that we have now in Vietnam.
Now we’re starting to have clear guidance and recognition of crypto as a new asset class in Vietnam.
I think that for me, that’s a very meaningful moment, where you entered a space almost a decade ago, when everyone thought Bitcoin was a scam, and now you’re starting to see your country becoming a lot more pro crypto — I think that’s super, super awesome.
Sure. And so on that then, I guess you’ve sort of had your business since 2018 and then everything sort of changed. I guess last year was sort of when the really big stuff sort of started to happen, and you guys stopped serving Vietnamese customers. Is that right?
Yeah, exactly. I think in September, when the regulation — Resolution Five — was released and also became effective immediately.
I think that’s the moment where we’re trying to comply with the policy first, because I think it’s still unclear, and there was no guidance yet on what kind of licenses — do you need a license to operate a non-custodial wallet or not, and I think we’re operating a non-custodial wallet, and within the wallet there’s a lot of features like earn, stakings, even swaps between native assets that we allow the users to do, and it’s still unclear, the answer on that, at the time.
So we’re trying to comply with the policy first, during that time we engaged with the regulators, and I think as part of that effort, at the beginning of this month, I think on January 8th, we announced a JV (joint venture) between 98 and also G-Group, the parent company of F88 which is also a lending firm in Vietnam.
That’s also a part of the effort, where we’re starting to engage with the regulators and applying for the required licenses to continue to operate in Vietnam. I think moving forward, G98 will be the company and the brand that we’re going to operate in in the local market.
Sure. And so I mean with that regulatory uncertainty, I guess, how do you plan forward with G98? Sort of, what are the next steps you’re going to take? Presumably, you don’t want to spend a lot of money or invest a lot of money in something that may not get approved or that you don’t know how it’s going to function or work.
I think the way that we’re positioning G98 right now is that we’re becoming kind of a trusted partner of other exchanges in Vietnam.
I think, as you might know, there will be five licenses granted for the Vietnam market and then these five, who get these licenses, will have a kind of — they can’t offer a comprehensive suit of products related to digital assets and also crypto; however, I think we all know blockchain or crypto as a whole is is a huge industry, you cannot only operate one single exchange business without other additional products and services.
I’m talking about RPC (Remote Procedure Call) services.
I’m talking about auto and infrastructure businesses.
I’m talking about a brokerage business that’s sending the clients to you.
That will be the business we’re trying to target.
So number one, I think, is to continue to operate and dominate the Vietnam market. I think we want to make sure that we are very compliant with the policies and regulations, and during that time, we will apply for all the needed licenses to continue to operate in Vietnam.
We want to partner with the upcoming exchanges that are going to get the licenses and then partner with them by serving those services and products to them.
So, partnering with an exchange — Now, I guess last week there was a decision or a circular that came out sort of detailing what you would need to do to register as an exchange. One of the criteria was I think it was 390 or it was 10,000 billion dong, right about 390 million US dollars.
That’s almost 400 million.
Yeah. So, I’m curious. You’re a relatively small firm, and I’m thinking, as opposed to Binance or something big, and you’re talking about partnering with someone.
I wonder, do you see yourself being able to partner with a bank in Vietnam — presumably they’re the only institutions that are probably going to have the funds to meet this sort of criteria, right?
I think that that’s a very good question.
I think initially we thought about this before we decided to make our moves, and the way that we think about this is there are different types of capital, right?
You have financial capital, you have talent capital, and knowledge capital.
I think for ourselves, I think for financial capital, we might have a bit of a lack of resources compared to other institutions, but we have foreign knowledge capital, talent capital, and also network capital. I think that, especially within this space.
I think that would be something that Vietnam is lacking, and a very good example of that is, I think when I started to get into the market in Vietnam I think there are very few almost — like there’s only Kyber back then in 2017, now I think Kyber, Sky Mavis — and so 98 are one of very few firms still existing and operating in it.
So that also means there’s very little talent that’s working in this space that has enough experience — we’ve been building our products and continuing to operate this for a long time, almost a decade, and I think that that can be one advantage why these firms want to work with us.
I think Vietnam has a population of 100 million — the market is big, but if you combine all the workforce coming from Sky Mavis, Kyber, and 98, there’s not, there’s never enough to actually fulfil all the services that the country needs.
So I think that’s where we need to collaborate with each other to make sure that we can serve this market.
Sure. And then so on that, the market — because one of the other criteria — I’m a little bit sketch on this one so forgive me if I’ve misinterpreted it. My understanding in the initial stage is that it’s only going to be foreign firms or foreign investors that are going to be able to use this exchange. Is that correct?
Nope. I think initially — so there’s two types, right?
So, for new asset issuance, which will be a lot more focused on RWAs (Real World Assets) that would be only for foreigner investors, but for existing assets, I think that will be allowed for Vietnamese retail users to actually access that and also companies as well.
So, actually, local players can access this local exchange and buy Bitcoin.
Okay. And so, on that though, if you’ve got a local exchange, because Vietnamese are expected to transfer their assets into the new exchange, once it’s operational, right?
Yeah. Yeah.
And so presumably that limits the amount of people that then you can sell to, right? At the moment you’re trading on an international exchange, you can have a buyer in the United States or Australia or anywhere really, right? But with this exchange, those buyers would have to go to Vietnam to buy the Vietnamese people’s assets.
Which to me seems a big ask. Why would I go to this Vietnamese exchange when I can use exchanges that cover the entire world? Do you see this as a problem?
I think that could be a problem for foreigners, for investors outside of Vietnam, but for Vietnamese, I think that’s the only way you can buy, so you know international exchange is no longer an option legally for them.
Sure. It’s no longer legally required, but it is still possible, right?
I think Vietnamese is very familiar with this kind of ban and then you know, I think initially a lot of them will try and see what’s going to happen, but I think at the moment where they think the government is becoming serious about this, I think that’s that’s also the moment where people will — for the convenience they will move onto the local exchange.
Last time, you can see the government blocking Telegram in just one night.
When the moment comes where the government blocks all these kinds of international exchanges, that you cannot access from normal IPs, I think that that’s where people will think, okay, maybe we just need to withdraw it back into the local exchange to trade.
Are you still using Telegram?
They open again already. But I think that’s a test.
You think you think it was a test?
I think that’s a test. Like, you know, means like, they have full capability, they can block an app overnight.
Sure. Okay. Sending a message kind of thing. Yeah? We can if we want to?
Yeah, maybe.
Interesting. I wonder, what are you hearing from the community then about transferring assets back? Does it sound like it’s something they’re going to do, or do you worry that people might leave the market altogether?
I think there’s two things, right?
So I think number one, of course, you know, everyone is complaining about that.
Because actually, you know, there’s push back, you know, from cryptonatives, right?
Because now imagine you’re trading — you’re driving in a Ferrari car or very luxury car, a premium car, and now you have to go back into a Toyota or other types of normal cars — but I think they also know they will have no choice and then it’s going to end up with everyone starting to comply.
So that’s pretty clear.
For other types of people, I think I’m starting to see a trend of people just selling and completely leaving the market.
How much of that do you think is because of this, and how much of that is just general in the crypto market?
I feel that because of this — you know this is a kind of a minority reason.
A lot of that is just there’s not much interesting in the crypto market nowadays as well.
And it is just like an add-on reason why maybe it makes sense, where the premium is not there anymore and then they just leave.
Yeah. Okay. And so just rolling back to people getting forced to go onto the exchange. I just wonder how you envision that as being policed? Is this practical? Is there a way to police this?
That’s a very good question.
I think there will be a transition time, right?
So you have six months. So I think in the first six months you can see a lot of people will — I think a very likely outcome is in the first six months everyone who already has crypto will open accounts, but maybe they will wait and see how things go.
However, for people who want to buy and sell crypto, they will need to use that because now you can no longer use Binance peer-to-peer because there’s no OTC (Over-the-counter) people who will continue to operate.
I think that people who are operating OTC business will be the first ones to be heavily impacted by this, and the moment where you can access Binance, but you cannot buy crypto using your dong, you will need to go back into the local exchange.
I think that’s also a reason why I do believe you know everyone will 100 percent create accounts and start doing some trade on there.
However, whether they will put their entire portfolio on there is the question.
So we will see how it’s going to play out after six months.
Yeah. Okay. One of the other things I heard about was this idea of a VND stable coin. Do you see this as being a possibility?
I think that’s a great idea, but I don’t think that in a short time — I don’t see why it should happen yet.
Okay. I think a lot of the trading that gets done in Vietnam is people moving money across borders as opposed to speculative trading.
Which, I mean, would make sense in US dollars particularly remittances I think from overseas workers and so I just kind of wonder, I mean, what I’m trying to say is I see crypto as more functional, more as a functional thing less as an investment tool, and so then I wonder if it moves to this exchange I wonder how those transactions — if that’s still a function that will be able to be performed. Does that make sense?
Yeah, I think for other people that want to move the money into the country, I think that’s going to be a really good tool for them, and it’s faster and cheaper for them to actually send USD and dollars back into Vietnam.
However, I think there are still questions on whether or not the local exchange would be a very good tool for people to send money out of Vietnam.
I think it’s good. It’s good in one way. It’s like, you know, the money in, it would be easy, and I think that would encourage people to use the tool, but not vice versa.
Yeah. Money out is a bit more challenging.
There could be a lot of use cases that we think could benefit from it — for experts and diplomats and for foreigners working in Vietnam or living in Vietnam or just travelling here, I think that would be very convenient for them to start paying for services without the need to open a bank account.
If you can actually use crypto and you can start paying with that, there will be services in the middle and back end to settle those kinds of transactions.
Sure. But I mean that only really works — the only real problem with getting money as a foreigner in Vietnam is if you’ve earned the money illegally. So it’s kind of, even if it was legalised, it would be difficult to use the system to transfer money out if you hadn’t earned it from a legitimate source. Does that make sense?
Yeah. I don’t know. Maybe that’s still a question.
I mean, this is one of those things where there’s a lot there’s a lot of gaps right to be filled in.
I feel a better way to think about the new regulation framework is that the government is making a positive, conservative plan to transition to make sure that they can build a healthy market for Vietnam.
So I think initially everyone might feel the policy is too strict and too controlling, but I think you know the approach here is it could be positively controlled and then start slowly opening as they’re starting to understand.
You can start seeing that with e-wallets in Vietnam — Within 10 years initially, I think 10 years ago they took the same approach on e-wallets, and then as the government started to understand the technology better, understand how people use it better, and how to control it better, they’ve been very aggressive on opening it.
From the moment that I understand that, I think within maybe not 10 years, maybe just three, five years, we’re going to see there’s huge development in terms of regulatory framework, and they will start in a way where — it will be a lot more open when they feel they can control it.
Okay. And can I ask, do you think that your views reflect the broader community’s sort of views, or where do you think you fit in? Are you more optimistic or more centrist?
I’m quite optimistic about this, optimistic about this kind of opportunity.
However, I think that the game has changed and it is becoming a lot more regulated and so you have to be a lot more mature and professional in offering these kinds of services.
For us it’s no longer an experiment.
For us, right now, we think that this is a part of the whole fintech world, and we’re starting to develop our skills and upgrade our knowledge to make sure that we can keep up in this space.
Yeah. Okay cool. All right, that kind of does it.
Did you have anything else you wanted to add or anything you don’t think I’ve covered?
Another thing on G98 is I think alongside partnering with this kind of exchange we also want to be trusted partners for other global partners entering Vietnam.
I think in a broader way Vietnam being regulated also opens it up to better opportunities for products and services to offer to the masses.
I think back then there was only a minor set of people that entered the space and understood and started using crypto, but now we can see a lot more people in Vietnam and a larger portion of the population starting to access this market and we’re going to be a bridge and a trusted partner for other global partners when they get into Vietnam.
Okay have you been talking to anyone or…?
I mean there’s a lot of — we’re starting to work with a lot of institutions in the US right now to serve their ecosystems.
So they are the layer-ones, they are custody partners, they are even global exchanges trying to partner with the local teams to offer liquidity support or other types of education and stuff like that as well.
Stable coins companies Tether and also Circle we’re in talks to all these kinds of partners. So we’re trying to help bridge and connect all these kinds of partners globally from our network and bring them into the local market as well.
Sure. And what kind of questions are they asking? What are their concerns?
I think right now they understand the regulations.
So for them it’s just trying to work with local partners here, especially young people who’ve got a license to develop the market.
Vietnam is just rebuilding the whole market right in a very more regulated way. So they want to contribute to that.
It’s interesting because I feel the difference between probably the demographic that deals in cryptocurrencies and the people sort of making the decisions or building this framework. I think they’re very different — they just come from very different angles on what you want to get out of it and what you want to achieve. Have you found that a struggle or…?
I think initially I shared the same thoughts, but the more I engage with them, I think they’re just trying to start with very, like I said, positive, conservative plans where they are trying to start small first and start expanding over time.
I think when I talk to them they understand very well the concept of crypto businesses.
But what they are trying to do right now is start small and bridge crypto with trad-fi (traditional finance), because if it is not managed well it could create conflicts around capital flows.
They want to make sure that the money that citizens put into this market will also contribute to the economy and also the GDP of Vietnam as well.
And for that I think that even if they have a resolution that they want to empower this kind of space, they want to take it slowly and see a lot more data coming in before they make bulk moves on that.
Once they start having all the data that can validate their point, I think they will start opening the space in a way where people can access a lot more services that also benefit the country.