A clear legal framework for blockchain is needed to promote its on-track development and application in Vietnam. (File Photo) Hoai Nam, founder of investment UB Holdings, said that with a friendlyenvironment for blockchain and crypto together with an entrepreneurial spirit, Vietnamwas attractive to foreign investors and it’s time for blockchain projectdevelopers to show their capacity.
One of the recent notable deals was 150 million USD in funding led by cryptoexchange Binance for the gaming studio Sky Mavis to help reimburse users wholost funds during a 625 million USD hack of its play-to-earn game AxieInfinity.
2021 witnessed the biggest ever investment of around 25 billion USD pumped intothe global blockchain market, representing a whopping rise of nearly 700 percent.
The non-fungible token (NFT) market alone saw a rise of 13,000 percent from 37million USD in 2020 to 4.8 billion USD in 2021.
The figures showed that investment funds were attaching significant interest toblockchain, Tran Dinh, CEO of blockchain business advisory company Alpha True,said.
The industry had its ups and downs. The blockchain market had been quiet sincethe beginning of this year, especially in terms of GameFi (play-to-earnblockchain game).
However, Nguyen Manh Khoi, CEO of Koru Capital, said that the investment flowinto the blockchain market in Vietnam would not lose momentum because a numberof domestic and foreign funds were waiting for opportunities to pour money inqualified projects and companies.
Khôi said Vietnam was an attractive market for investors thanks to theGovernment’s support for technology start-ups, a young population, a goodworkforce, high Internet coverage and high rate of population knowing aboutcryptocurrency which was in the top three in the world.
Legal barrier
The blockchain industry in Vietnam was facing legal barriers which forced manyblockchain start-ups to “go abroad” to Singapore, Cyprus and Europe to open acompany.
Statistics of Yield Guild Games showed that as of the beginning of May, therewere around 1,000 blockchain game projects were being implemented in Vietnam,among which Sky Mavis’s Axie Infinity was the most notable with a total marketcapitalisation once hitting 9.7 billion USD together with about 10 start-upswith market capitalisation of over 100 million USD.
However, most of them were based in foreign countries while the market andhuman force were mostly in Vietnam.
Cris Duy Tran, co-founder of FAM Central, said that there was a lack of a clearlegal framework for blockchain in Vietnam, which caused problems in theoperation and fundraising process. In comparison, the legal framework ofSingapore was more friendly.
This was a type of brain drain as developers came from Vietnam but thecompanies were located in other countries, making it difficult for Vietnam tobecome a start-up nation.
According to Nguyen Thanh Trung, CEO of Sky Mavis, the fact that blockchain projectsoften chose Singapore was directly related to the capital flow. Receivingforeign investment in Singapore was much more convenient than calling forcapital from Vietnam, he said, adding that the laws in Singapore were alsoclear while in Vietnam, deals with higher value would face bigger problem.
Trung said that a clear legal framework was a plus point for blockchainstart-ups. The lack of a legal framework made start-ups feel nervous and forcethem to operate in a defensive mindset because of not knowing what would happentomorrow.
Not only in Vietnam, many countries lacked clear regulations for blockchain,digital assets, NFT or cryptocurrency. Technology changes rapidly and the legalframework must be adjusted to keep pace with its development and ensure itsdevelopment is on the right track, Huy Nguyen, co-founder of KardiaChain said.
Huy predicted that with a proper legal framework, blockchain technology wouldnaturally creep into every corner.
According to Deputy Minister of Science and Technology Tran Van Tung,blockchain technology has large potential in Vietnam with a large number ofbusinesses, scientists and engineering pursuing research and application ofthis technology.
Tung said that the ministry would review and amend the legal framework of thescience and tecnology industry to create favourable conditions for blockchainresearch and development as well as spending resources in the development ofblockchain applications.
At the Vietnam Blockchain Expoverse in Dubai in March, Nguyen Ngoc Dung fromthe Ministry of Planning and Investment said that different countries haddifferent levels of economic and technology development, thus, the applicationof new technologies would not be the same. She said that start-ups came toSingapore to solve the problem of capital raising then bring money back to Vietnamto operate the project.
Dung said that the legal framework for international capital raising would berevised, making it easier for start-ups./.
VNA
