Fintech advocates see Vietnam as a potential future hub of blockchain based technology despite messy government regulatory framework.
Blockchain Provides Potential for Growth
The Vietnamese economy has grown by leaps and bounds in the last three decades becoming what the world bank describes as resilient and looking at 6.7% growth in the coming year.
Fintech advocates say there is room for improvement though and point to the fact that as a nation it is still under-serviced when it comes to banking needs. While only 31% of adults in the country have bank accounts, 40% will have smartphones by 2021 and that could lead to a revolution in the nation’s financial services.
Nicole Nguyen, head of corporate marketing at Vietnam’s Infinity Blockchain Labs sees great opportunity for people to bypass the traditional system of investing and saving in order to establish credit with fiat banks, saying that;
“This presents excellent opportunities for Vietnamese startups to bootstrap their ideas and grow their user base, specifically by tapping in (to) our massive underbanked population,”
Infinity Blockchain Labs hosted a Blockchain Week Conference earlier this month that brought 2,000 attendants to Ho Chi Minh city to discuss “Vietnam’s future in the global blockchain ecosystem.”
The application of blockchain technology to bring banking services to the masses was only one issue discussed at the conference. Another was its potential use in registering land titles to add a layer of legal protection to rural farmers as well using it to track production, logistics and transaction costs in the future.
Regulatory confusion presents a hurdle
Despite the fact that Vietnam has a strong startup ecosystem, even supported by the government in part the overall new technology regulatory framework is in chaos. A decree issued October 30 by the State Bank of Vietnam (SBV) has effectively determined that virtual currencies are not a legal form of payment.
This effectively has outlawed the overall existence of cryptocurrencies in Vietnam. Those found guilty of violating the decree can be fined up to 200 million Dong (about $9,000 US). This was followed by a January 30 request issued by the State Securities Commission that securities firms not provide any cryptocurrency related services to their clients.
Still judging by the response the Blockchain week conference had enthusiasm for the technology in Vietnam is overwhelming. Nguyen sees blockchain being implemented in fintech, agritech, medical fields and overall in the internet of things (IoT).
Nguyen knows that it won’t be all smooth sailing and cites the lack of solid regulatory framework and low awareness of the benefits the technology can bring as hurdles but still claims, “I believe this is just the start for Vietnam to identify and realize blockchain potentials.”