Why are cryptocurrencies so popular in Vietnam?According to the Crypto Adoption Index, in October 2021, Vietnam surpassed most countries in terms of the overall peer-to-peer transaction value, as well as payments made by individuals. Initially, cryptocurrency appeared as a viable alternative for remittance transfers from overseas Vietnamese who were looking to avoid the hassle and costs associated with using banking services. In general, remittances have been representing a substantial share of Vietnam’s GDP, which gave early cryptocurrency usage a good foothold in the country.
Another possible explanation for the popularity of these digital assets in Vietnam is that they are often seen and used as investment tools. The uncertainty brought about by the COVID-19 pandemic gave rise to investment interest in cryptocurrencies as a new income source among Vietnamese investors. Furthermore, the Vietnamese population has been known to embrace all things digital, from the internet and smartphones to digital payment formats such as e-wallets and crypto assets.
Cryptocurrencies in Vietnam: Bitcoin, GameFi, and moreBitcoin is arguably the most established cryptocurrency worldwide, and Vietnam is no exception. Regardless of the emergence and development of other cryptocurrencies, Bitcoin remains the digital currency with the most search interest and the highest ownership rate among Vietnamese investors. Apart from Bitcoin and other well-known cryptocurrencies such as Ethereum, GameFi is another popular cryptocurrency category among Vietnamese investors. GameFi cryptocurrencies combine gaming and decentralized finance, which means participants can make a profit from playing games and investing in tokens at the same time. Vietnam's growing gamer community provides GameFi coins with a solid basis to thrive. For instance, AXS, a GameFi cryptocurrency created by the Vietnamese game developer company Axie Infinity, has recently achieved a market capitalization of over 2.5 billion U.S. dollars within a few years of its release.
Nevertheless, all cryptocurrencies still face the challenge of not being recognized as either a legitimate payment form or as a type of property in Vietnam, hence, the exchange of these assets has yet to be legal. While Vietnamese investors still trade and use crypto assets using international platforms, their activities are potentially subjected to legal fines, and their investments are neither taxable nor protected by Vietnamese laws. The State Bank of Vietnam is currently working on a pilot regulation project for digital assets, which is to be implemented latest in 2023. The elimination of this legal gap should foster the further development of the crypto market in the country in the future.