How Vietnam Is Using Crypto Regulation to Improve Its FATF Reputation

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Vietnam is tackling its Financial Action Task Force (FATF) gray list status by introducing comprehensive crypto regulations aimed at meeting international standards, combating digital asset fraud, and boosting its financial reputation.

On June 14, 2025, Vietnam’s National Assembly passed the Law on Digital Technology Industry, effective January 1, 2026. This law creates a clear legal framework for digital assets, classifying crypto assets (like Bitcoin and Ether) separately from virtual assets, and sets licensing and compliance requirements aligned with FATF guidance.

Why FATF Matters

The FATF, established by the G7, sets global standards to prevent money laundering and terrorist financing. Countries that don’t comply risk being gray-listed, which damages their financial credibility and investment appeal.

Vietnam’s Challenges and Reforms

Vietnam was gray-listed in June 2023 due to weak anti-money laundering (AML) and counter-terrorism financing (CFT) controls, especially around crypto service providers. The new law addresses these gaps by requiring strict AML/CFT measures, including identity checks and transaction monitoring for crypto exchanges and wallet providers.

Key Features of the New Law

Legal recognition of crypto assets with detailed classifications

Tax incentives and support for digital startups and foreign experts

Regulatory sandboxes to encourage blockchain and DeFi innovation

Clear rules separating stablecoins for tighter oversight

Fighting Fraud and Boosting Innovation

The law strengthens authorities’ powers to investigate crypto scams and enhances cooperation with international regulators. It also supports Vietnam’s goal to become a regional digital hub by attracting investment and fostering tech talent.

Outlook

By fully implementing these reforms, Vietnam aims to exit the FATF gray list and restore trust in its financial system. The new regulations not only improve compliance but also create a more attractive environment for global crypto businesses and investors, positioning Vietnam as a leader in Southeast Asia’s digital economy.