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- 1 Vietnam is among top countries in terms of crypto adoption, especially for Bitcoin.
- 2 The Vietnam Crypto Market Report of 2022(VCMR) states that 16.6 million (17% of Vietnamese population) Vietnamese have invested in cryptocurrencies.
Investing in cryptocurrencies provides benefits such as higher returns, diversification, greater control over one’s finances and privacy. Investors are attracted by the volatile nature of cryptocurrencies like Bitcoin, the lure of high returns and the opportunity to exercise greater control over one’s wealth. A research conducted by Chainalysis has shown that Vietnam is a leader in cryptocurrency adoption; giving them a perfect rating of 1.000. 28.8% of blockchain projects or Decentralized Finance (DeFi) applications are developed in Vietnam.
Factors That Led to The Growth Of Crypto In Vietnam?
High Transaction Fees
Vietnamese people who work abroad, need to send money to support their families. However, traditional banks charge high fees for processing international transactions. Thus, citizens have switched to alternatives such as Bitcoin to securely make digital transactions without any central authority or government influence. This method has helped in crypto adoption since they are able to make seamless payments at low transaction fees.
Government Support
The Vietnamese Government supports cryptocurrency and has not imposed taxes on crypto. The government has recognized cryptocurrencies as legal. The State Bank of Vietnam is exploring the merits and demerits of cryptocurrency to draft regulations accordingly. This helped in boosting the confidence of citizens, as their investments in crypto will be backed by law.
Economic Instability
Vietnam has suffered a lot of economic instability and inflation due to big wars the country fought between 1946 to 1975. Traditional banks have been unable to provide good returns and provide limited access. Therefore, citizens have invested in Bitcoin as an alternative to secure their wealth in a decentralized system. Cryptocurrencies are accessible to citizens with an internet connection.
Growing Tech Industry
Vietnam has seen substantial growth in its tech and gaming industry. Citizens indulge in blockchain games to earn rewards. Vietnam has been a hub for blockchain projects, especially focused on Game Finance (GameFi). 7 out of the top 200 blockchain companies have been created in this country. The report by VCMR also states that Vietnam is the second largest (number of crypto holders) country in ASEAN (Association of Southeast Asian Nations) region, after Thailand, with 31% of them holding Bitcoin. The country has had a major impact in the crypto community.
To Combat Inflation
Vietnamese culture has always had a strong affinity towards gold, and other precious metals. The younger generation can utilize this digital space to reap the benefits of a fledgling industry. Vietnamese citizens have been collecting gold as a hedge against inflation. At one point, the Vietnamese held 400 tons of gold. In Vietnam, where locals do not have access to traditional banks, cryptocurrencies like Bitcoin allow them to participate in the global economy.
Vietnam is leading in the rapid adoption of Bitcoin due to several verified factors.The company is also heavily interested in blockchain technology and is a leader in cryptocurrency adoption. Vietnamese citizens have taken up Bitcoin due to several factors and its popularity is likely to grow.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
