Is Vietnam the next Web3 hotspot?

Author: Yuanshan Insights Source: X, @Yuanshan0626

- In late January, the Ministry of Finance officially launched a pilot program for licenses to cryptocurrency trading platforms

- The 10 trillion Vietnamese dong (nearly 300 million RMB) entry threshold directly weeded out small and medium-sized players, allowing local financial giants to enter the market

- Establishing a new geopolitical division of labor of "Dubai compliance, Vietnam development," aiming to become the "core foundry" of the Web3 world.

The Davos Forum has just ended, BlackRock's CEO declared that "the financial system should migrate to Ethereum," and the NYSE announced the development of a tokenized securities platform.

Here, Vietnam's Ministry of Finance launched a pilot program for cryptocurrency trading platform licenses, with a 10 trillion Vietnamese dong (nearly 300 million RMB) entry threshold, effectively excluding small exchanges. Traditional finance embraces Web3, while emerging Southeast Asian markets erect compliance barriers. Does it want to become the next Hong Kong, or the next Singapore? [01 | What Happened] In late January, Vietnam's Ministry of Finance officially launched a pilot program for cryptocurrency trading platform licenses. This is a landmark event marking Vietnam's shift from a "gray area" to clear regulation. There are three key points: Entry threshold: Paid-in capital must reach 10 trillion Vietnamese dong (nearly 300 million RMB). In comparison, this figure is more than 16 times the Philippines' 100 million peso (approximately US$1.8 million) threshold. **Application Entity Restriction:** Applicants must be Vietnamese domestic companies. This means that companies like Binance and Coinbase cannot directly obtain licenses and must enter through local joint ventures or acquisitions. **The first batch of institutions to express participation include SSI Securities (a leading securities firm in Vietnam) and MB Bank (a commercial banking giant), both traditional financial institutions. **Timing:** This move occurred less than a week after this year's Davos Forum. **During the forum, signals of a global regulatory race were already emerging—Japan announced the legalization of Crypto ETFs by 2028, the UK Financial Conduct Authority (FCA) is close to completing its cryptocurrency regulatory consultation, and the US Congress is advancing legislation on "crypto market structure." Vietnam's move is a response to this global race. This is also a publicly known fact. 【02 | From Gray Market Profits to Scaled-Up in the Sun】 Vietnam's cryptocurrency market previously operated in a "gray area"—neither explicitly legal nor completely prohibited. In this ambiguous state, numerous small exchanges thrived unregulated and unlicensed. User funds lacked protection, and fraudulent activities were frequent. The significance of the licensing system lies in its shift from "gray market profits" to "scaled-up in the sunlight." The nearly 300 million RMB threshold blocked smaller exchanges with insufficient funds, but created space for well-established local financial institutions. The entry of traditional institutions like SSI Securities and MB Bank means that user asset custody, compliance, and anti-money laundering will be implemented according to traditional financial standards. The Philippines offers a comparable example: From the end of 2025 to the beginning of 2026, the Philippine National Telecommunications Commission (NTC), acting on instructions from the central bank, blocked nearly 50 unauthorized platforms, including Coinbase and Gemini. However, the trading volume of the locally licensed exchange PDAX experienced explosive growth. Compliance did not end the market; rather, it redistributed the market share. Vietnam was not the first to take action. Looking across Southeast Asia, Thailand, Malaysia, and the Philippines all completed upgrades to their regulatory frameworks between 2025 and 2026. --Thailand issued formal guidelines in early 2026 supporting the establishment of spot Bitcoin and Ethereum ETFs and incorporating crypto assets into the Derivatives Act framework. To attract institutional investors, the Thai Ministry of Finance approved a capital gains tax exemption policy that will continue until December 2029. --Malaysia adopts a "dual management" model: the Securities and Futures Commission (SC) is responsible for classifying cryptocurrencies with investment attributes as "securities," while the Central Bank of Malaysia (BNM) is responsible for monitoring and anti-money laundering. Currently, six licensed exchanges are permitted to operate, and the SC adopts a "zero-tolerance" attitude towards unlicensed platforms. --The Philippines, on the other hand, has raised the entry threshold: according to the SEC's Crypto Asset Servicer Rule issued in 2025, all platforms operating in the Philippines must be registered as local companies with paid-up capital of no less than 100 million pesos (approximately US$1.8 million). Vietnam's actions are a follow-up in this Southeast Asian regulatory race and part of a regional trend. If Vietnam continues to maintain a gray area while its neighbors are establishing compliance frameworks, it risks losing the opportunity to attract legitimate institutions. A frequently overlooked background is the emerging geopolitical division of labor in the global expansion of Web3 companies: Dubai (compliance center) + Vietnam/Malaysia/Thailand (development center) + global markets (operations coverage). Dubai, through the establishment of VARA, the world's first dedicated regulatory body, has become the preferred location for Web3 startups to register and achieve compliance. However, Dubai faces high talent costs and significant cost pressures for technology development and ecosystem building. Southeast Asian countries like Vietnam, Malaysia, and Thailand, with lower talent costs and supportive local policies, are becoming "development centers." Vietnam's licensing system signifies a shift from "grey market development" to "compliant development"—companies can legally establish technical teams in Vietnam to develop DApps and infrastructure without fear of policy changes. This geopolitical division is a major boon for the Web3 industry. Companies can handle compliance in Dubai, development in Vietnam, and market coverage globally. This "trading traffic for resources" logic is more sustainable than simply "not complying with regulations anywhere." [03 | Why it might also bring risks] - Entry barriers may increase industry concentration. Nearly 300 million RMB in paid-in capital may not seem high to traditional financial institutions, but it represents a significant hurdle for local crypto companies. This could lead to a monopoly of the Vietnamese crypto market by traditional financial institutions, resulting in a lack of innovation. The Singapore experience provides a comparison: The Monetary Authority of Singapore (MAS) has an extremely long review period for crypto exchange licenses, focusing on money laundering prevention and technical risk management. As a result, many innovative startups are unable to obtain licenses and ultimately choose to leave Singapore. Singapore has a mature regulatory framework, but it has also lost some innovative companies. Will Vietnam repeat this mistake? If traditional institutions like SSI Securities and MB Bank dominate, will they have sufficient incentive to promote emerging businesses? Will crypto trading still be operated as "just another financial product," lacking an understanding of the native Web3 culture? - Compliance costs may be passed on to users. The licensing system brings compliance costs—KYC processes, custody fees, regulatory reporting—which may ultimately be passed on to users. If transaction fees at licensed exchanges in Vietnam are significantly higher than international platforms, users may turn to the underground market or use VPNs to continue accessing overseas exchanges. Compliance aims to protect users, but excessively high compliance costs may push users to less secure channels. - Mismatch between regulatory capacity and market innovation. Vietnam's crypto market is still in its early stages. Do regulators have sufficient technical capabilities and talent to regulate complex DeFi protocols, cross-chain transactions, and stablecoin issuance? The real problem is that while SSI Securities and MB Bank may excel in traditional financial services, they may lack experience in Web3-native businesses such as on-chain governance, smart contract security, and liquidity mining. If regulators also lack expertise in these areas, the licensing system may become merely a formality—regulation on the surface, but unable to identify real risks. Another point is geopolitical uncertainty. Vietnam's crypto market primarily covers Southeast Asia, but the region's geopolitical situation is complex. US influence in Southeast Asia, China-ASEAN relations, and regulatory coordination between Vietnam and its neighbors—these factors can all affect policy stability. If Vietnam's licensing system is incompatible with the regulatory frameworks of neighboring countries (Thailand, Malaysia), it could increase the difficulty of cross-border business compliance. Can Web3 companies' products developed in Vietnam operate smoothly in Thailand and the Philippines? If not, Vietnam's role as a "development center" will be significantly diminished. 【04 | Hong Kong vs. Singapore: Vietnam's Choice】 Vietnam's nearly 300 million threshold and policy of prioritizing local institutions have signaled that it doesn't want to become the next Philippines (low threshold, high activity), but rather chooses between Hong Kong and Singapore. Hong Kong's approach is "retail-friendly + financial product innovation": allowing retail trading, approving spot ETFs, and establishing a stablecoin sandbox. This openness has attracted a large amount of capital from Asian backgrounds, but also means higher regulatory costs and risks. Singapore's approach is "institution-friendly + strict control over retail": the Monetary Authority of Singapore discourages speculative trading by retail investors, but strongly promotes the application of blockchain in wholesale settlement and asset securitization (such as Project Guardian). The entry threshold is extremely high, but the ecosystem is more stable. Vietnam's nearly 300 million threshold and policy of prioritizing local institutions seem to be following the Singapore model. However, the question remains: can Vietnam's financial infrastructure and talent pool support the "institutional-level high standards" of regulation? If Vietnam wants to become the "Singapore of Southeast Asia," it needs more than just a licensing system; it also needs a sound legal framework, a professional regulatory team, and deep alignment with international standards. These all require time and resources. For Vietnam, following the Hong Kong model means rapidly gathering liquidity, attracting retail funds, and building a Southeast Asian crypto trading hub. But the question remains: do Vietnamese regulators have sufficient expertise to handle the complexities of the retail market? If retail funds are at risk, can Vietnam provide a robust appeal mechanism like Hong Kong? A third path: "Development Center + Remote Compliance" Perhaps Vietnam doesn't need to become Hong Kong or Singapore. It can take a third path: becoming a Web3 enterprise development center, while leaving compliance in Dubai, Hong Kong, or Singapore. This geographical division of labor is taking shape: Dubai (compliance center) + Vietnam/Malaysia/Thailand (development center) + global markets (operational coverage). This path is more realistic. Vietnam doesn't need to compete with Hong Kong and Singapore for the status of a compliance center, but it can leverage its talent cost advantages and policy support to become a recognized "hotbed for development" in the industry. [05 | Impact on Retail Investors: Compliance is Not the End] The licensing system most directly affects ordinary cryptocurrency users in Vietnam. In the past, they could freely choose international exchanges or local small platforms with low fees and low barriers to entry, but they bore the risks themselves. Now, if Vietnam strictly enforces the licensing system, unlicensed platforms may be blocked (as in the Philippines). Users can only choose licensed exchanges operated by SSI Securities or MB Bank. Advantages: User funds are protected by escrow, the KYC process is standardized, and there are appeal channels for resolving issues. Disadvantages: Transaction fees may increase, the number of available cryptocurrencies may decrease (regulators typically only approve mainstream coins), and product innovation may slow down. For younger Vietnamese retail investors—who may be accustomed to platforms like Binance—this shift may be challenging. If local licensed exchanges cannot provide a comparable user experience, some users may turn to VPNs or P2P over-the-counter trading, creating new regulatory blind spots. The regulatory goal is to protect users, but overly rigid enforcement may push users to less secure channels. Vietnam needs to find a balance between protecting users and maintaining market vitality. 【06 | Perhaps a Third Path is More Realistic】 The Hong Kong path attracts retail investors and liquidity, but requires extremely strong regulatory capabilities. The Singapore path is stable but has extremely high barriers to entry, requiring mature financial infrastructure. Vietnam lacks both. However, a third path is more realistic: becoming a Web3 development center, leveraging its talent cost advantage, and placing compliance in Dubai or Hong Kong. The significance of the nearly 300 million threshold lies in pushing the market from a "gray area" to "compliant development"—companies can legally establish teams and develop products without worrying about sudden policy changes. This is the first time Vietnam has regulated "crypto asset trading platforms" as a formal financial business.