Untangled laws are essential to blockchain
Blockchain technology is heavily used in the gaming industry. Play-to-earn games based on non-fungible tokens (NFT) provide an opportunity for ordinary individuals to understand how blockchains and cryptocurrencies work, especially how the blockchain economy works. Players do not earn traditional fiat money directly, they can earn tokens, which can be converted to major cryptocurrencies and then further converted to fiat or used directly.
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However, due to the lack of a legal system for cryptocurrency payments, Vietnam is missing the chance to unleash the full potential of its blockchain gaming sector. The country also loses the opportunity to increase the state budget and protect investors.
In July, the Governor of the State Bank of Vietnam (SBV) issued Circular No. 09/2022/TT-NHNN providing guidance on currency management applicable to the business of award-winning electronic games for foreigners. The circular came into force on 1 September.
According to Article 4 under the circular, players can exchange tokens to a foreign currency or VND if they have not used them up or if they win prizes in tokens at enterprises and can use foreign currency amount exchanged from tokens to perform the transactions.
However, these rules only apply to electronic games that win prizes. Meanwhile, the regulatory bodies have yet to issue any legislation governing the exchange of tokens in the NFT and GameFi field.
Trinh Ngoc Duc, CEO of FOTA, told VIR: “There is currently no official exchange platform in Vietnam that allows Vietnamese citizens to trade cryptocurrencies. Remitano is one of the so-called Vietnamese exchanges that work with local banks to help consumers trade cryptocurrencies, even though the head office is based abroad.
He added that the majority of Vietnamese citizens can only transact via international exchanges and nations where cryptocurrencies are legal. As a result, the nations can attract exceptionally large amounts of foreign exchange from around the world.
If Vietnam can formulate a legal framework for this field, the country can attract a huge amount of money. This prospect is underpinned by Vietnam’s position as one of the world’s top 10 nations in the crypto and blockchain field in terms of users and transaction volume.
Over the past few years, Vietnam has emerged as one of the leading countries in the NFT and GameFi scene. A survey by Australian data research company Finder from March to May revealed that Vietnam ranks fifth in the world in terms of NFT players, supported by the growing popularity of entertainment platforms that play to make money.
About 23 percent of surveyed respondents in Vietnam say they play NFT games, and 9.6 percent indicate they will continue to do so in the future.
Meanwhile, many Vietnamese startups are expanding their reach into the global blockchain market. The startups have received funding from individual investors and funds around the world.
The lack of a legal framework means Vietnam will lose out on foreign capital. However, Vietnam’s government does not seem unaware of these possibilities. In March, Deputy Minister Le Minh Khai instructed relevant ministries to develop a regulatory framework for digital assets and cryptocurrencies.
In addition, Vietnam is considering a new circular to regulate NFTs and GameFi. If approved, the recent circular will pave the way for related projects to enter the Vietnamese market. This development will also encourage Vietnamese startups to build their business in Vietnam.
The Duc of FOTA said that there are many experts and industry leaders who have gained a deep understanding of the legal framework in other countries. “Vietnamese regulators should consult with these experts to discuss and find solutions that match the Vietnamese market. This will make it easier for Vietnam to develop the legal framework in accordance with national laws to draw in the cash flow and increase the country’s position in the global market, he added.
Source: VIR
