Vietnam Enacts Groundbreaking Crypto Law to Address FATF Gray List Status

• Vietnam passed the world’s first standalone crypto law in June 2025 to address FATF gray list concerns and boost its digital economy. 

• The law creates clear rules for crypto businesses and offers tax breaks to attract global investment and talent. 

• These reforms could help Vietnam exit the FATF gray list by January 2026 and become a regional digital finance hub.

Vietnam has passed comprehensive cryptocurrency legislation that positions the country as a digital finance pioneer while addressing international regulatory concerns. The Law on Digital Technology Industry, approved by Vietnam’s National Assembly on June 14, 2025, becomes effective January 1, 2026.

The legislation establishes Vietnam as the world’s first nation to implement standalone digital technology industry regulations. This move comes as the country works to exit the Financial Action Task Force (FATF) gray list, where it was placed in June 2023 due to anti-money laundering and counter-terrorism financing deficiencies.

The FATF, founded in 1989 by the G7 nations, sets global standards to prevent money laundering and terrorist financing. Countries failing to meet these standards face placement on monitoring lists that can damage their international financial reputation and investment climate.

Vietnam’s gray list designation resulted from inadequate supervision of financial institutions, weak customer due diligence procedures, and insufficient regulation of virtual asset service providers. The country must implement a comprehensive action plan to regain FATF compliance and restore international financial trust.

New Framework Defines Digital Asset Categories

The law creates distinct classifications for digital assets that align with international regulatory expectations. Crypto assets encompass digital currencies like Bitcoin and Ethereum that utilize encryption or blockchain technologies for management and transfer. Virtual assets include non-financial digital items used for exchange or investment purposes.

This classification system excludes securities, central bank digital currencies, and traditional financial instruments from crypto and virtual asset categories. The government controls each asset type’s licensing, oversight, and operational guidelines.

Crypto service providers will operate under state supervision with mandatory compliance procedures. These requirements include identity verification, transaction monitoring, and reporting obligations designed to prevent illicit financial activities.

The legislation empowers authorities to collaborate internationally on digital asset fraud investigations. This provision enhances cross-border enforcement capabilities and demonstrates Vietnam’s commitment to combating global cryptocurrency crimes.

Recent fraud cases underscore the urgency of these reforms. In February 2025, authorities arrested four individuals behind BitMiner, a fraudulent crypto-mining scheme that defrauded 200 victims of over 4 billion Vietnamese dong. December 2024 saw Hanoi police disrupt the Million Smiles scam, which used deceptive advertisements to promote QFS cryptocurrency, resulting in approximately $1.17 million in losses.

Economic Incentives Drive Innovation Hub Strategy

The law supports Vietnam’s ambition to establish 150,000 digital technology firms by 2035 under the “Make in Vietnam” initiative. Tax breaks, grants, and import duty exemptions target startups, small and medium enterprises, and foreign technology investors.

Vietnamese digital experts receive five-year tax exemptions, while foreign specialists obtain five-year visas without work permit requirements. These incentives aim to attract global talent and investment to Vietnam’s emerging digital economy.

The legislation introduces regulatory sandbox mechanisms that allow controlled testing of blockchain, decentralized finance, and virtual asset technologies. This framework enables innovation while maintaining regulatory oversight and risk management.

Blockchain, artificial intelligence, and chip design firms benefit from tax reductions and subsidized access to digital campuses and innovation parks. The government provides grants and infrastructure support for research and development in semiconductors and cloud technology.

International Compliance Strengthens Global Standing

Vietnam’s crypto law addresses FATF Recommendation 15, a key issue in the country’s gray list designation. The State Bank of Vietnam has simultaneously tightened anti-money laundering rules, updated risk assessments, and strengthened customer due diligence requirements under revised Circular 09.

Full implementation of these reforms by January 2026 could facilitate Vietnam’s removal from the FATF gray list. Clear regulatory environments enhance investor confidence and reassure international crypto businesses, venture capitalists, and technology firms.

The legislation enables seamless integration between cryptocurrency operations and traditional banking systems. This connectivity improves digital asset businesses’ access to capital markets and institutional finance.

Vietnam’s comprehensive approach signals its commitment to meeting international financial standards while fostering digital innovation. The country positions itself as a transparent, regulation-compliant destination for global cryptocurrency and technology investments.