Foundations set for blockchain

May 30, 2022 | 09:58
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Vietnam’s blockchain market is expected to flourish in the months to come, driven by recent new moves supporting the long-awaited building of a legal framework and high growth potential.
Foundations set for blockchain
Foundations set for blockchain. Photo FOTA

On May 17, players in the blockchain industry burst with happiness when the Vietnam Blockchain Association (VBA) officially made its debut. It was approved by the Ministry of Internal Affairs and became the first official legal entity in this field in the country.

New chairman Hoang Van Huay said that the association will advise on the building of the legal corridor as well as standards in the development and application of blockchain-based tech products and services. The entity will, together with members, strengthen ties with international organisations, thus contributing to Vietnam’s digital transformation efforts.

At the same event, a comprehensive cooperation programme was announced to promote the blockchain application strategy in the digital economy and national digital transformation, with human resource training a top focus. Many cooperation agreements were also signed between the VBA and various businesses, training establishments, and research institutes.

The previous month, the Vietnam Blockchain Union also made its debut, with the aim of connecting the business community and consulting on policymaking for the development of blockchain technology.

The union’s top mission is to create a specific legal framework and provide judicial support, with a secondary goal of advising state policy management agencies. It also wants to support startups in the blockchain field by advising them on security issues.

A representative of a startup focusing on a social NFT platform for content creators said, “The union is a key development for blockchain players, including us. We have been operating through worry for years because there had not been official rules for blockchain. The prospect is bright for blockchain players to go ahead as Vietnamese young people are very interested in technology.”

The platform plans to carry out fundraising rounds in the months to come in order to launch new projects and tap into new trends, the representative added.

Le Van Duong, lawyer at Indochine Counsel said, “I think that this is one of the most important initial steps and the beginning of the Vietnamese market’s hot blockchain trend.”

The promotion and development of such technology will enable Vietnam to leapfrog into the digital age. The Ministry of Science and Technology is now implementing key programmes over the next few years to support research, development, and application of 4.0 industry technologies, with blockchain being among the priorities.

In spite of these new signals, it will take time for Vietnam to complete the legal framework for the industry. Businesses are expecting step-by-step change and completion of rules to facilitate their activities, with the establishment of a legal entity in the country being among the highest expectations. Currently, blockchain players mostly raise funding overseas and establish legal entities overseas.

In fact, ambiguity in legislation is hindering high potential projects from flourishing. Cryptocurrency purchases have not been fully legalised in the country, while the laws governing NFTs are similarly ambiguous.

Tran Van Tung - Deputy Minister of Science and Technology

Foundations set for blockchain

Industry 4.0 development trends based on breakthroughs in digital tech are happening at different levels in countries worldwide, creating an increasingly strong impact on socioeconomic development. Therefore, the establishment of the Vietnam Blockchain Association is absolutely necessary.

We expect that the association will gather businesses, organisations, and individuals in the blockchain industry to share experience and resources to promote research, testing, and application of blockchain technologies, thus contributing to the country’s success in national digital transformation, and development of the digital economy in Vietnam. It will also enable the country to master technologies and create Vietnamese tech products for the global blockchain market.

We also expect that it will work together with the Ministry of Science and Technology and other relevant agencies and ministries on building and completing a legal framework for the development and testing of products, services, and solutions based on blockchain technologies.

Nguyen Dinh Thang - Chairman, Vietnam Digital Startup Club

Foundations set for blockchain

The global blockchain market is booming but remains in the early development stage in Vietnam. Blockchain is now only applied in a few sectors, such as traceability for agriculture and fisheries; or trading and lending activities in the banking sector. Vietnam is yet to have a concentrated or non-concentrated transaction floor for blockchain.

The establishment of the Vietnam Blockchain Union is a good move for players, gathering efforts and resources for future activities and strategies towards 2030.

At present, successful Vietnamese blockchain technology firms are based overseas. As a legal framework for blockchain in Vietnam is not available for startups to operate and market their products, they tend to choose nearby countries where legal procedures are open. Singapore, for example, has policies that allow new initiatives and sandboxes for new products in fintech, AI, and others.

We expect to keep resources and initiatives in the home country by allowing them to operate legally. The state is then able to collect taxes and attract investment. We propose allowing Vietnamese companies to establish their legal entities in Vietnam and only run business activities licensed in the country, and run other activities abroad.

Vietnam now has good opportunities for digital transformation, but speed is very important. Therefore, the country needs to soon develop a sandbox and open policies for blockchain products, services, and solutions. A legal framework can be worked out and opened step-by-step to facilitate business activities.

Nguyen Xuan Yen - Vice guild master, Djinn Guild Game

Foundations set for blockchain

For a long time, D.lion has had a subsidiary called “Tech vision solution” in Singapore, showing that the legal updates for blockchain games were not entirely transparent previously. Therefore, when establishing a project such as ours or D.lion’s ones, we too faced initial challenges.

Despite the difficulties in our early days, we never gave up on our mission to connect traditional and blockchain game-lovers as well as professional players. Djinn’s spirit is to turn playing games from a kind of entertainment into an actual job.

Besides games outsourcing, I believe Vietnam has a large number of prospective players. We should assess our country’s potential more precisely in terms of game developers and players. Currently, Djinn has 50 players, and they are all professionals. Although the current market is growing but not fully open, I believe complete legal updates will facilitate Djinn’s development as well as the development of the Vietnamese blockchain industry.

The Vietnamese crypto market is growing, and so the creation of a legal framework for blockchain and crypto will enable companies like ours to apply blockchain technology in practice.

By Bich Thuy

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