Key Takeaways
- Ho Chi Minh City is looking to attract crypto firms to its new International Financial Centre.
- Companies that have already expressed an interest include Binance and Tether.
- To make the new center more attractive, the City plans to develop a regulatory sandbox for crypto.
Crypto is on course to become a pillar of the new Ho Chi Minh City International Financial Centre (IFC).
With the legal framework in place for Vietnam’s first special economic zones, the City plans to develop a regulatory sandbox for digital assets that could help kick-start the country’s crypto ecosystem.
Ho Chi Minh IFC Seeks To Attract Crypto Firms to Vietnam
The Ho Chi Minh IFC is part of a two-city special economic zone that includes the Vietnamese capital, Ho Chi Minh City, and Da Nang.
The project is intended to attract international investment and cultivate Vietnam’s financial services sector by offering tax incentives and government support to firms that set up shop in the IFC.
From the outset, state and city officials have made financial technology a top priority.
At an event attended by Prime Minister Pham Minh Chinh on Monday, Nov. 25, major crypto firms signaled their support for the new center.
Through the Global On-Chain Economy Alliance, companies including Binance and Tether will promote Ho Chi Minh as a digital asset hub.
At the same event where the alliance was launched, the Ho Chi Minh City Department of Finance signed a memorandum of understanding with Binance, which will see the two parties collaborate to support Vietnam’s nascent cryptocurrency sector.
A Regulatory Sandbox for Crypto
As part of its agreement with the city, Binance will advise on the development of a new regulatory sandbox for the Ho Chi Min IFC, local media reported.
In established financial hubs like Singapore and the IFCs of the United Arab Emirates, regulatory sandboxes have been instrumental in attracting crypto firms seeking a reduced compliance burden and a more dynamic regulatory environment.
How much flexibility the new IFC’s sandbox environment creates could determine its success in a country that tends to enforce strict financial regulation by regional standards.
Compared to Singapore, Indonesia, Thailand, and the Philippines, Vietnam’s foreign exchange and capital controls can create barriers for international investors and startups.
Loosening them within the IFC would make Ho Chi Minh much more attractive.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
