The key to promoting digital economic growth in Vietnam

In one of the proudest and most impactful events in Vietnam’s technology sector last year, the Vietnam Blockchain Summit became the first major blockchain festival in the country, with the participation of more than 2,000 experts from top domestic and international blockchain tech companies.

The key to promoting digital economic growth in Vietnam, photo shutterstock

It not only helped to reflect a vibrant blockchain market in Vietnam, but also demonstrated that the technology is having a strong influence on the economy, especially in economic fields based on public applications.

Hoang Van Huay, former deputy Minister of Science and Technology and now chairman of the Vietnam Blockchain Association, said, “Blockchain is a special technology for the digital era. It is not only a tool to solve technical problems, but also contributes to creating relationships between partners through the connection of information, especially in the economy and finance.”

He added that most of the world’s major economies have come up with digital tech development strategies associated with economic growth, and Vietnam is no exception.

According to statistics from the Ministry of Information and Communications, Vietnam boasts more than 70,000 digital technology businesses, with revenues from IT reaching more than $152 billion by the end of 2022. Vietnam is also forecasted to achieve the leading digital economic growth in Southeast Asia with a scale of about $52 billion by 2025, according to the e-Conomy SEA 2022 report by Google, Temasek, and Bain & Company.

Last March, the government issued Decision No.411/QD-TTg approving the national strategy for development of the digital economy and society to 2025, with orientation to 2030.

“The government set a target that the digital economy will account for 20 per cent of GDP by 2025,” said Huay. “Blockchain technology must also participate in this process and needs to contribute more to promote the development of the digital economy.”

Currently, blockchain technology is being applied in more than 60 different fields, not only in finance but also in aspects of science and technology, education, and personnel organisation.

Nguyen Bach Viet, strategy director of Microtec Vietnam, said that blockchain will contribute to the digital economy with the role of providing traceability data of stages in the production process, automating the application of technologies like AI and e-identification, and contributing to the reduction of human control. In addition, blockchain also helps to speed up transactions between parties, simplifying cross-border payments.

“The technology will be extremely useful in the car rental business, for example. The lessor and lessee will not need to carry out the same direct procedures as before, but only need a few steps through their phones,” said Viet.

In the medical field, blockchain is also used in electronic records while in education, information and lessons can be transmitted through a digital platform for students to access knowledge, saving time and travel costs. And in e-commerce, blockchain will also help store and own digital assets.

However, according to many experts, one of the reasons hindering the application of blockchain technology to the digital economy is that knowledge about the potential and the tech itself has not yet been widely disseminated.

Mai Ngo, a blockchain expert from digital asset exchange platform Gate Learn, said that research is not only the job of banks and businesses, but users also need to actively participate in its process.

“Improving users’ digital skills is always a challenge when new technology appears because user behaviour changes as technology changes. Vietnam still does not have many experts in this field,” Nho said. “Many local leaders and even businesses have not been able to access and disseminate the knowledge. Therefore, we need to promote training on blockchain technology and research to apply it more widely.”

Tran Quang Chien, founder of ONUSChain, assessed that blockchain tech platforms will help large enterprises reduce operating costs and increase customer trust. In contrast, small businesses with poor financial conditions need to find a smarter way to approach it if they do not want to spend too much money.

“Misunderstandings about blockchain associated with crypto also make the widespread application of technology in digital economy industries difficult, even though Vietnam is also one of the countries with the highest rate of blockchain adoption in the world,” said Chien.

In Vietnam, research by MarketsandMarkets shows that the blockchain-related market is expected to reach a value of nearly $2.5 billion by 2026.

Currently, there are more than 10 Vietnamese innovative startups in the blockchain field with a market capitalisation of over $100 million.

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