The innovation process needs blockchain technology switch

October 26, 2023 | 21:00
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Blockchain technology is considered the future, according to experts and organisations from around the world. Tran Le Hung, deputy head of Fintech Applications at the Vietnam Blockchain Association, told VIR’s Oanh Do about the contributions of blockchain technology in the digital economy and promoting the innovation process in Vietnam.

What role does blockchain play in the digital economy, and in what fields has it been applied in Vietnam?

According to a report by Boston Consulting Group in 2022, the value of global digital assets is on a strong growth trend, expected to reach about $16 trillion by 2030, equivalent to 10 per cent of world GDP.

The innovation process needs blockchain technology switch
Tran Le Hung, deputy head of Fintech Applications at the Vietnam Blockchain Association

Major economies such as the United States, EU, Hong Kong, South Korea, Switzerland, and Thailand also issued legal regulations to promote the application of blockchain. Industries applying this technology have also expanded from gaming and finance to culture, entertainment, education, logistics and are expected to soon be widely covered in other fields.

The supply chain and data management sector has begun adopting the tech to increase transparency and trust. Blockchain can also be used in the medical field to securely manage patient data and share medical information between hospitals, treatment facilities, and regulatory agencies.

In the energy sector, it can help track and manage renewable energy trading, creating a fair and transparent environment for energy trading. The insurance sector can also leverage it to improve claims processes and reduce fraud risks. In addition, it can also be applied in elections, establishing and managing intellectual property rights, confirming use authorities and real estate transactions as well as many other fields.

In Vietnam, blockchain is not only applied in games or financial transactions, personal purchases but has been replicated in other fields such as Genetica with genetic code storage technology, and e-learning applications.

With the goal of bringing the digital economy to contribute 20 per cent to GDP by 2030, Vietnam should not miss the opportunity this brings. We have high capacity to serve this industry and also the country with the highest blockchain application adoption index in the world, according to a Chainalysis 2022 assessment.

How can blockchain support startup businesses?

Startup businesses, in addition to building products, also face many difficulties in accessing capital and equipping themselves with knowledge and operating procedures.

This tech will help startup businesses build simpler initial capital raising plans and open up opportunities to access capital sources not only domestically but also from foreign retail investors.

Through this transparency, investors can monitor and track capital easily. Many investment funds are ready to disburse money to companies implementing products using blockchain. The help does not stop at contributing capital but also includes sharing experiences and mentoring.

The Vietnam Blockchain Association (VBA) has built the Switch Up initiative to help startups more easily access domestic and foreign financiers, learn from experts, and ensure the building of a startup more effective and less costly.

Why does Vietnamese law not have specific regulations to encourage businesses to promote this new technology, even though it has high applicability in many fields?

The government has shown interest through promoting and supporting projects as well as paying attention to crime prevention activities in digital space, including money laundering, and terrorist financing through the blockchain platform.

The VBA is also accompanying government agencies such as the State Bank of Vietnam, the National Assembly Committee on Science, Technology, and Environment, and the Government Cipher Committee to advise on legal issues and share the experiences of other countries with the participation of experts in economics, law, and technical issues.

To encourage more and more businesses to participate in applying this in their operations, there will be a need for legal documents and corridors to guide implementation methods.

Applications will also be safer when there is a legal system complete with cryptographic assets. Vietnam must also indirectly comply with the regulations the FATF Global Financial Task Force alliance committed to in June.

This regulation requires the government to promptly issue regulations from identifying cryptographic assets to criminal control and promotion processes to capture opportunities to exploit this in the future.

While state management agencies have not issued specific legal documents, the VBA has initially developed a set of standards for evaluating projects and on-chain activities and providing a portal that reports suspected violations to the community through the ChainTracer scheme. I believe that is the first step in promoting the construction of a legal corridor in the future.

What has the VBA done to help blockchain participate more deeply in Vietnam’s innovation ecosystem and pull in foreign funds?

Introducing on-chain technology and accompanying other tech in promoting production and business efficiency is one of the goals of the VBA.

To attract foreign investors, we have also signed MoUs with many blockchain associations in Asia, Dubai, and elsewhere in the Middle East, creating a premise to build connection sessions between international groups and domestic businesses.

In addition, we also cooperate with educational institutions, especially universities, to build seminars, sharing sessions with hundreds of students, and build clubs to engage attention for the actual work of this industry.

Our country already has unicorns, such as VNLife company with VNPay product. The formation of a unicorn in the blockchain industry is probably only a matter of time, given that the market has accepted it.

With the potential for widespread access to blockchain and a team of staff who are always exploring and learning new things, I believe that in the coming years, we will soon see such companies develop stably and sustainably in Vietnam.

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By Oanh Do

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