In 2018, Vietnam was the fourth-fastest growing economy in the world with gross domestic product (GDP) growth of 7.1%. Although this is expected to dip slightly to 6.9% in 2019, Vietnam would still have considerably outperformed the Southeast Asian regional GDP growth rate of 4.8% for the same year.
A notable gambit in favour of the Vietnamese economy is the ongoing US-China trade war which has diverted significant foreign direct investments (FDI) from China to Vietnam. In the first half of 2019 alone, Vietnam’s trade surplus with the United States rose by a massive 39% to reach US$25.3 billion. Safe to say, the longer the trade war drags on, the greater the gains will be for the Vietnamese economy.
The impressive growth of the Vietnamese economy certainly bodes well for the development of its blockchain and crypto industries, as a booming national economy is a sure-fire way to provide the all-important impetus to drive forwards the local tech sector. As the Vietnamese government has made clear its intentions to provide comprehensive support for the use of digital technologies in the country (as exemplified by its collaboration with leading Japanese technology companies to ensure a sufficient IT talent pool in the country), the local blockchain and crypto industries can rest assured that it will be equipped with the necessary ingredients to forge ahead this year. With this in mind, let’s explore what is in store for Vietnam’s local blockchain industry in 2020.
Vietnam is renowned as a hotbed for tech startups, with about 800 of such startups operating in the country as of November 2019 accounting for about 42% of the total number of startups in the country. However, 2020 is set to be the year when Vietnam cements its reputation as Southeast Asia’s (SEA) prime destination for blockchain startups, as the country’s Ministry of Science and Technology is set to give utmost priority to such startups through a new small and medium-sized enterprise (SME) accelerator project.
In addition, Vietnamese state agencies are also reportedly working on building a roadmap to guide the use and application of blockchain in the country. Given these developments, blockchain startups in Vietnam are all set to propel their operations forward in 2020.
In 2017, Vietnamese Deputy Prime Minister Vương Đình Huệ signed a policy decision setting out the government’s plans to reduce the volume of cash transactions in the country to less than 10%. In November 2019, the State Bank of Vietnam (SBV) announced that it has developed a US$700 million cashless payment network in collaboration with South Korean payment service provider Alliex and that the operations of the network are set to commence in 2020.
Given this major development in the Vietnamese financial technology (FinTech) market, it is unsurprising that the market is projected to be worth US$7.8 billion by 2020. All in all, the increasing use of blockchain in Vietnam’s FinTech domain is perfectly in line with the government’s aim to establish a cashless society in the country, which renders the prospects of further uses of blockchain for the local FinTech domain to much greater levels.
In fact, Vietnam’s Tien Phong Commercial Joint Stock Bank (TPBank) has already shown the way for the use of blockchain in the local FinTech domain through its collaboration in November 2019 with SBI Ripple Asia to leverage the latter’s RippleNet blockchain-based global payment network for processing cross-border transactions. If it is possible to have a peep at the proverbial crystal ball, it will most probably show an upsurge of blockchain-related developments in Vietnam’s FinTech domain in 2020.
In November 2017, the Vietnamese government launched its Smart City Project with the aim of developing Ho Chi Minh and Hanoi into smart cities by 2020 and 2030, respectively. In furthering the Vietnamese government’s Smart City Project, local developer BRG Group together with Japanese finance house Sumitomo had in October 2019 jointly launched their smart city project located on a 272 ha site in Dong Anh district in northern Hanoi. The smart city will leverage digital technologies such as blockchain, 5G, and facial recognition to ensure the sustainability of the urban environment.
With the construction of Hanoi’s upcoming smart city slated to commence in 2020, Vietnamese will have yet another blockchain development to look out for in the year ahead.
Vietnam’s booming national economy, coupled with its vibrant startup ecosystem, renders it to be an ideal launchpad for promising blockchain startups to enter the Southeast Asian market. Although the jury’s out on the Ministry of Justice introducing regulations for cryptocurrencies, perhaps 2020 will see a synergistic rise of blockchain and crypto in the Land of the Ascending Dragon.
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