Vietnam shows great potential for blockchain growth

November 06, 2023 | 17:26
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Vietnam has the potential to make a significant contribution to blockchain advancement in Southeast Asia thanks to its high crypto-adoption rate, abundant IT workforce, and tech-savvy young population.
Vietnam shows great potential for blockchain growth

Speaking to VIR, Le Thanh, founder of Vietnam-based blockchain startup Ninety Eight, formerly known as Coin98, said, "Blockchain in Southeast Asia is keeping up with the development curve of global blockchain technology. Other technologies like AI and big data were first developed in America and Europe before spreading to Asia. Meanwhile, blockchain is one of the very few technologies that Southeast Asia can take the lead in."

He noted that the region is becoming a more popular destination for entrepreneurs and investors looking for fast-growing startups in the blockchain industry. Blockchain startups can attract venture capital funding worth hundreds of millions of dollars in just a short few years.

Founded in 2018, Sky Mavis, the Vietnamese company behind popular blockchain game Axie Infinity, raised $1.5 million during its 2019 seed round. In 2021, it raised $7.5 million in its Series A, rising to $152 million in Series B, and the following year it raised $150 million in Series C. Meanwhile, Amber Group, a Singapore-based crypto firm that helps companies trade and manage digital assets, has raised a total funding of $628 million over four rounds since its debut in 2017.

Southeast Asia is home to 8.58 per cent of the world's population but makes up 14 per cent of global cryptocurrency transactions. Nations in the region consistently dominate worldwide rankings for blockchain adoption, and Vietnam, the Philippines, and Thailand are ranked in the 2022 Global Crypto Adoption Index Top 20 by Chainalysis, with Vietnam holding the top spot for the second consecutive year.

Consumers across the region have readily adopted digital products and services, according to the e-Conomy SEA report released on November 1 by Google, Temasek, and Bain & Company.

"These favourable demographic indicators support the development of novel technologies, including blockchain. In particular, the huge number of young digital natives here creates a launchpad to unlock the potential of the blockchain industry. Furthermore, countries in the region possess different strengths. Singapore encourages regulated crypto exchange operations and hosts more than 230 home-grown blockchain startups. Meanwhile, the Philippines has experienced an incredible boom in crypto users," Thanh said.

Vietnam not only has a high rate of crypto adoption but also boasts a large pool of tech talent. According to a report by TopDev published in September, the current number of programmers in Vietnam is about 530,000. The number of IT students enrolled each year is about 50,000-57,000.

Tran Duy Hung, vice chairman of the Fintech Application Committee under the Vietnam Blockchain Association (VBA), said, "Vietnam possesses important advantages in developing blockchain technology thanks to its abundant human resources, and the salary of the IT workforce in Vietnam is only half or even one-third of other countries."

Vietnam a catalyst for blockchain advancement in Southeast Asia
A blockchain-based physical item made in Vietnam

Hoang Van Huay, chairman of the VBA, said blockchain was more flexible and superior to other technologies in integrating existing products and services and developing new ones.

"However, due to the novelty of the technology, there are still barriers to promoting the application of the blockchain industry. To develop blockchain into a spearhead technology, Vietnam needs to quickly promote the knowledge and application of blockchain across all economic sectors," he said.

In a bid to contribute to the fledgling industry, Ninety Eight, which specialises in developing technology infrastructure for blockchain startups as well as blockchain gateways in Vietnam, has launched a $25 million blockchain-focused fund on November 1 to advance the blockchain ecosystem and support startups. The fund will provide capital for startups in Vietnam to develop new products and facilitate their raising of funds in later rounds.

"As a home-grown startup, Ninety Eight has grown to serve 8 million users globally. We have many best practices and lessons to share with other blockchain startups to scale up operations and extend their reach to the world. This $25 million fund is the starting point for us to accompany startups on the journey of blockchain advancement," Thanh said.

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Indonesia had 17.91 million cryptocurrency investors as of September, marking a 0.67% increase from the previous month’s figure of 17.79 million investors, according to the Commodities Futures Trading Regulatory Agency (Bappebti).

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By Thanh Van

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