“Proposed Pilot for Trading Tokenized Securities on a Digital Asset Exchange”

The suggestion was made by Ms. Doan Mai Hanh, Senior Director of Sales and Proprietary Trading at Techcom Securities (TCBS), during the seminar “Experiences and Operations of Crypto Asset Exchanges” held on March 27.

The event took place as regulatory authorities are finalizing the dossier for a resolution on the pilot issuance and trading of crypto and digital assets. The resolution is expected to be submitted to the National Assembly for consideration at the May session.

According to Ms. Hanh, once digital assets are recognized with a clear legal framework, TCBS will integrate them into their product offerings for clients. This will provide an additional investment channel, helping to diversify portfolios and mitigate risks for investors. However, the representative from TCBS acknowledged that digital assets are still novel and carry many risks and challenges. Therefore, she suggested that careful selection of digital assets offered to clients is essential.

While major global exchanges like Binance and Coinbase support trading for hundreds of digital currencies, the leader of TCBS suggested that Vietnam should pilot a limited number of digital currencies. These could be those with high value and liquidity, recognized in multiple economies.

Ms. Doan Mai Hanh, representative of Techcom Securities, speaks at the event on March 27 in Hanoi. Photo: Hoang Anh

For other asset classes, Ms. Hanh proposed piloting tokenized securities on this exchange. She explained that this type of product is very similar to traditional financial assets such as stocks, bonds, and fund certificates. Additionally, these tokens have the advantage of being divisible, unlike traditional securities.

“Service providers and investors have experience with traditional asset classes, so transitioning to digital finance will be safer for all parties,” shared the representative of TCBS.

A representative from Dragon Capital also suggested piloting the tokenization of ETF products using blockchain technology. These financial products are backed by real assets (RWAs) and provided by reputable financial institutions under the supervision of regulators. This proposal aims to encourage individual investors to participate in the capital market by combining digital and traditional assets.

Centralized exchanges in Vietnam, which handle large trading volumes, can play a crucial role in legal supervision, ensuring KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance.

Currently, Vietnam lacks a legal framework for crypto and digital assets, leading to a competitive disadvantage and tax losses. From a user perspective, the lack of transparency results in transaction risks. Therefore, establishing a legal framework for the identification and valuation of digital assets will enable businesses to access capital from banks and make investments.

However, experts emphasize the need for strict regulations and limitations when piloting this new financial model in Vietnam. According to Pham Duc Trung, Chairman of the Vietnam Blockchain Association (VBA), the digital asset market still operates in a “gray area,” but many exchanges and innovative companies want to establish a presence in Vietnam. Mr. Trung added that the government aims to standardize the market, and this pilot will be a step towards that goal.

Therefore, the VBA Chairman suggested that entities should not expect multiple exchanges or a market open to everyone during the pilot phase. Even if some entities cannot participate in the initial stage, Mr. Trung encouraged them to collaborate with regulatory agencies in policy-making to promote a healthy market.

Last week, a representative from the State Securities Commission (under the Ministry of Finance) shared that in the draft resolution submitted to the government, they proposed a limited-scale pilot in the initial phase. This will also allow authorities time to develop appropriate policies for managing crypto and digital assets. It is recommended that the Ministry of Finance, the Public Security, and the State Bank jointly manage the digital asset exchange to mitigate financial security risks.

Dung Yang Hung, Deputy Head of Counter-Terrorism, Department of Homeland Security, speaks at the event on March 27. Photo: Giang Huy

According to VBA data, as of the end of 2024, Vietnam had approximately 17 million digital asset owners, ranking in the top 7 globally. Last year, Vietnam received over $105 billion in crypto assets, a decrease from the $120 billion recorded in 2023. About 20 exchanges for these assets operate in Vietnam.

Regarding anti-money laundering efforts in the pilot of the digital asset exchange, Mr. Dung Yang Hung, Deputy Head of Counter-Terrorism at the Ministry of Public Security’s Department of Homeland Security, proposed establishing an inter-agency task force. This task force would include representatives from the Ministry of Public Security, the State Bank, the Ministry of Finance, and the VBA to oversee and share information on suspicious transactions.

While Vietnam has not recorded any cases of terrorist financing through crypto assets, the risk remains present. Mr. Hung noted that Vietnam’s location in Southeast Asia, close to countries previously affected by terrorist activities such as Indonesia, the Philippines, and Thailand, could make it a transit point for illegal cross-border funds, including terrorist financing.

The representative from the Ministry of Public Security also suggested strict penalties, including license revocation or criminal liability, for exchanges that fail to comply with regulations.

Anh Tu