Vietnam was the #1 place globally for cryptocurrency adoption, according to two independent studies in 2021. This is despite a 2017 ban on the use of cryptocurrencies as legal tender in Vietnam — but not as an investment vehicle.
These studies have grabbed headlines because they focused on ordinary citizens, through surveys and on-chain metrics, rather than large institutional investors (which would be dominated by the USA), providing a window into mainstreet’s view of the emerging technology.
Vietnam Ranks #1 According to On-Chain Analyses of Crypto Adoption
The crypto-analytics firm Chainalysis recently published it’s “Global Crypto Adoption Index”, which ranks 154 countries by exchange volume on peer-to-peer platforms (such as DEFI and/or HodlHodl.com). On-Chain analysis leverages the public-nature of crypto-ledger nature, in which the transactions are (mostly) publicly-available and immutable, providing the gold-standard in terms of token’s network utilization.
According to the Crypto Adoption Index, Vietnam ranked #1, with an score of 1.0 out of 1.0. For comparison, neighbouring countries like Thailand and China had scores of ~0.16 (ranked 12), and United States had a score of 0.22 (rank 8). In second place was India with a score of 0.37.
Global Surveys of Crypto Usage
Although chain-analyses are considered more insightful than surveys, it is nonetheless interesting that an independent survey corroborated the Chainalysis conclusion. Finder conducted a survey of 42,000 people in 27 countries, the result being that 41% of Vietnamese have purchased cryptocurrency. This ranks Vietnam #1 among surveyed countries.
The report states: “Vietnam also tops the list for Bitcoin ownership. In Vietnam, Bitcoin is the most popular coin to own (20%), followed by Bitcoin Cash (7%), Ripple (5%) and Ethereum (5%).”
As for why cryptocurrencies are so popular in Vietnam, the report claims that remittances top the list of reasons (although, we have our own explanations ).
Top Reasons Why Vietnam Ranks #1 For Crypto Adoption
Getting reliable data on why Vietnam is so popular is difficult. Based on our discussions with crypto-users in Vietnam, we have heard the following reasons (which we detail more in a companion article):
- There is limited access to traditional investment vehicles and asset-classes in Vietnam.
- Vietnam has a large under-banked population (nearly 70% of Vietnamese are estimated to lack a bank account; source) and ATMs are rare in rural areas.
- Almost all older Vietnamese use to trade and hoard gold, but not the younger generation.
- Crypto presents an venue for getting money out of Vietnam and out of the Vietnamese dong, which has historically suffered large devaluations.
- Historical experiences with government-sanctioned collectivization of private property.
- Global remittances, with large expat communities and migrant-worker communities in the USA, Europe, Australia, Canada, Korea and elsewhere.
What is conspicuously missing in the above reasons is buying and selling goods via cryptocurrencies. Some gift-card platforms exist which accept crypto, but, on the street-level, there is very little evidence that Vietnamese are using crypto day-to-day for buying and selling goods.
In fact, physical cash is still the #1 way people transact in Vietnam, with digital payments and credit-cards still relatively rare (although they are growing rapidly among the younger urban population).
Is Bitcoin Legal in Vietnam?
Like many countries, the legality of cryptocurrencies in Vietnam is murky and evolving. The most significant legal decision was in July 2017 (Letter No. 5747/NHNN-PC) which prohibited the use of cryptocurrency for payments as well as prohibited the issuance of new cryptocurrencies (e.g,. ICOs). [source]
Later, under Directive No. 10/CT-TTg, financial institutions and agencies were directed to control and “prevent” cryptocurrency transactions.
These decisions were interpreted by many Vietnamese as leaving the door open for cryptocurrencies to be used for speculation and investment. However, the official legality of cryptocurrencies for cross-border remittances and/or speculation remains unclear.
Recently, in June 2021, there was formal approval of an “e-government” strategy for 2021-2025 (Decision No. 942/QD-TTg), which may be similar to the e-Government strategy of Estonia. Overtly, this has nothing to do with cryptocurrencies, but there is speculation that the 942-strategy will include a digital-ledger/blockchain strategy as well.
Top Crypto Currency Exchanges Serving Vietnam
The only exchange we have personally tried is Remitano [https://remitano.com/btc/vn], which can be used without KYC and for small purchases: you electronically transfer VND, and a corresponding amount of BTC or ETH is sent directly to your personal wallet.
Other popular exchanges include:
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