Population dividend, relaxed regulations, Vietnam is becoming a new holy land for cryptocurrency exchanges to go overseas.

Author: Pomelo, ChainCatcher

Vietnam has become a gold mine in the eyes of professionals in various industries due to favorable conditions such as potential population growth dividends, relatively tolerant regulatory policies, and low operating costs.

The success of Axie Infinity, a blockchain gaming product in 2021, has attracted attention from the Web3 industry to the Vietnamese market. Many experts even believe that Vietnam may become an important driving force for the next wave of crypto bull market, and the focus of cryptocurrency trading will gradually shift from the current South Korean and Japanese markets to emerging Southeast Asian markets such as Vietnam and the Philippines.

In early August, an exclusive article about the operation of Binance in the Chinese market was published by The Wall Street Journal, revealing that the Vietnamese market has risen to the top 5 countries in terms of trading volume on Binance. According to internal information collected by The Wall Street Journal, the trading volume of Vietnamese investors on Binance reached about 20 billion US dollars in May 2023, with futures trading accounting for about 90%. The trading volume of Vietnamese users ranked fourth among many countries in the overall trading volume on Binance.

Top 5 countries with the highest spot and futures trading volume on Binance in May 2023

This news quickly became the focus of attention from local Vietnamese crypto media such as Coin68 and Coin98insight, implying that the Vietnamese market has become a key area that cannot be ignored by the crypto industry.

Compared with the top three countries, China, South Korea, and Turkey, it is indeed curious that Vietnam has risen to become the fourth largest trading volume country on Binance.

We may not be unfamiliar with China, South Korea, and Turkey as hotspots for cryptocurrency trading. Among them, it is not surprising that China ranks high in terms of trading volume and number of users due to its large user base in the crypto space. In South Korea, high unemployment rate and housing prices, as well as severe social class stratification, have led young people to see cryptocurrency investment as a hope for a counterattack, making it one of the countries with the highest number of crypto traders. Turkey, on the other hand, has a consistently high inflation rate and severe devaluation of its national currency, the lira, which has forced people to seek inflation-resistant assets. Stablecoins and Bitcoin are good choices for Turkish people.

Although Vietnam is still an emerging market in the crypto field, various data shows that the number of crypto users in Vietnam is not lagging behind, but instead has consistently ranked first in the adoption of cryptocurrencies in 2021 and 2022.

However, besides Axie Infinity, there is not much related coverage about the Vietnamese market on the market, resulting in very limited understanding of the Vietnamese market among users, and it has always been seen as a mysterious presence.

Since Vietnam has grown into an important area that cannot be ignored in the crypto industry, it is crucial to quickly understand the layout of Web3 projects and related companies in this market. As the first entry point for users to enter the crypto world, exchanges’ user trading activity is often used to measure the popularity of crypto activities in the local market. So, what is the development of the crypto trading track in Vietnam?

In China, there are top exchanges such as Binance and OKEx, and in Korea, there are Upbit and Bithumb. So what are the trading platforms in the Vietnamese market? What are the criteria for local users to choose an exchange? This article will systematically analyze the current development status and exchange landscape of the Vietnamese cryptocurrency market.

Population dividend releases the growth potential of the Vietnamese cryptocurrency market, with a consecutive two-year leading adoption rate

In 2021, the phenomenon-level product Axie Infinity not only created employment and income opportunities for people in Southeast Asia such as Vietnam and the Philippines, but also triggered a wave of Web3 entrepreneurship locally, giving rise to a number of globally influential Web3 projects such as Yield Guild Games (YGG) and Ancient8.

The common characteristic among these projects is that their founding teams are based in Vietnam. Their success has attracted attention from the cryptocurrency industry to this fertile land, making it a gold mine for the Web3 industry. A large number of international capital and cryptocurrency enthusiasts have started to enter Vietnam, and some venture capital institutions have even set up special investment funds for Web3 projects created by Vietnamese teams, hoping to find the next Web3 hit product like “Axie Infinity” in Vietnam.

According to the “2022 Vietnamese Cryptocurrency Market Report” released by Coin98 Insights in March this year, there are 7 Vietnamese-founded blockchain companies among the top 200 blockchain companies in the world, including Axie Infinity, Ancient8, Yield Guild Games, Coin98, Kyber Network, etc.

As of December 2022, there are more than 200 operational blockchain projects in Vietnam, with over 200 active blockchain projects covering various fields including GameFi, DeFi, and NFT. Among them, games and metaverse projects account for 28.8%, DeFi accounts for 26.0%, NFT accounts for 12.4%, infrastructure accounts for 11.3%, and Web3 accounts for 5.1%.

In addition, the report also states that the digital asset trading volume in Vietnam reached 112.6 billion US dollars from July 2021 to June 2022, surpassing Singapore’s 101 billion US dollars.

In the “Global Cryptocurrency Adoption Index” report released by blockchain data company Chainalysis, Vietnam ranked first in cryptocurrency adoption rate for two consecutive years in 2021 and 2022. In centralized services, DeFi, and P2P transactions, the Vietnamese market has shown extremely high purchasing power and population adoption rate. Regarding this, Hunter, a partner at the Vietnamese cryptocurrency media BitouchNew, has a deep understanding. He said that you can see people on the streets of Vietnam carrying black plastic bags exchanging Vietnamese dong (VND) for USDT, and you can also use USDT to pay rent and some living expenses.

All these data fully demonstrate the potential and prospects of the Vietnamese cryptocurrency market. Currently, the development of the Vietnamese cryptocurrency market cannot be ignored. According to a report by MarketsandMarkets, the value of the Vietnamese blockchain-related market is expected to reach nearly 250 million US dollars by 2026, a five-fold increase from 2021.

However, for cryptocurrency companies, whether a market is profitable (such as lower costs), whether it can bring potential user growth, and whether the policy supports it will become important factors in deciding whether to develop that market. In the current Vietnamese market, costs and user growth seem to meet these expectations.

Firstly, in terms of cost, Vietnam can provide relatively inexpensive labor costs. According to the Coin98 Insights report, the average salary of blockchain personnel in Vietnam is relatively low compared to the global average. For example, for HR positions, the average salary of blockchain HR in Vietnam is $30,000 per year, while in North America it is $42,000 per year. For Web3 enterprises, the average salary for developer positions is $2526 per month.

Among them, during the “GM Vietnam Blockchain Week” event held in Ho Chi Minh City in July this year, the organizer Kyros Ventures provided a set of data:

Assuming a Web3 startup company with a 10-person structure (1 CEO, 5 engineers, 2 marketers, 1 BD, and 1 designer) has an initial funding of $5 million, if the headquarters is set in Vietnam, this configuration can enable the company to continue operating for 18 years. The same configuration can only last 8.5 years in China, 3.4 years in Singapore, and 2.9 years in the United States.

Secondly, the population growth dividend in Vietnam can bring potential user growth for cryptocurrency companies. In April of this year, Vietnam’s population officially exceeded 100 million, becoming the third Southeast Asian country with a population of over 100 million after Indonesia and the Philippines. The majority of the population consists of young people, with the majority being 18-34 years old, which perfectly matches the target audience of cryptocurrencies and provides an ideal soil for the adoption of cryptocurrencies.

In addition, Vietnam has a high mobile internet penetration rate, and the cost of users learning Web3 is relatively low. As long as companies take appropriate incentive measures, they can attract these people and potentially gain user growth. It has been reported that there are currently more than 16.6 million cryptocurrency holders in Vietnam, accounting for one-fifth of the total population, and 31% of them hold Bitcoin.

In terms of policy, currently, the Vietnamese government does not have a clear regulatory framework for cryptocurrencies, so such asset transactions are still in a gray area.

Although as early as 2018, the State Bank of Vietnam (SBV) explicitly banned all cryptocurrency-related transactions through the banking system, it did not prevent Vietnamese users from using cryptocurrencies. In July 2021, the Vietnamese Prime Minister announced an initiative instructing the State Bank of Vietnam to research and conduct a digital currency pilot, and also stated that cryptocurrencies and blockchain are technologies that Vietnam hopes to develop and master, which are beneficial to building a digital government.

In addition, as the application and demand for cryptocurrencies in Vietnam continue to rise, the Vietnamese government is also beginning to realize the potential and importance of cryptocurrencies, and is exploring how to regulate and manage the cryptocurrency market. In July last year, Vietnamese Prime Minister Pham Minh Chinh called on the Vietnamese government to study cryptocurrency regulation and include virtual currency amendments in the anti-money laundering bill, but the regulatory bill has been delayed.

Regarding the implementation of cryptocurrency regulation policies in Vietnam, Hunter mentioned that the complexity of the Vietnamese government’s structure determines that formulating relevant cryptocurrency policies is not an easy task, and it requires the consultation and agreement of multiple government departments before any conclusions can be reached. There should not be any specific cryptocurrency policies introduced in the short term.

It can be seen that the current Vietnam has a young and relatively low-cost labor force and an open attitude towards new technologies such as blockchain, and the ambiguous regulatory policies provide opportunities for the development of cryptocurrency-related projects.

What cryptocurrency trading platforms are there in the Vietnamese market?

As the first entry point for users to access the cryptocurrency world, exchanges are where most users and liquidity funds in the cryptocurrency market are concentrated. The trading volume and user activity of a platform are often important indicators to measure if a market is prosperous. Vietnam, considered to have the most market potential, is naturally a gold mine in the eyes of cryptocurrency exchanges, and they have flocked to establish a presence.

As early as 2019, Binance had already entered the Vietnamese market. Its CEO, Zhao Changpeng, even stated in a speech at the Binance Blockchain Week in Vietnam in 2020, “Since 2018, Vietnam has been one of the markets with the highest user activity for us. Vietnamese users have shown great enthusiasm for blockchain-based financing and trading, and Vietnam is likely to become the next global blockchain innovation center.” In 2022, Zhao Changpeng appeared in Vietnam again and attended the Vietnam NFT Summit held in Hanoi, signing a strategic cooperation agreement with the Vietnam Blockchain Association (VBA).

During the same period, well-known exchanges such as OKX, Huobi, and Bithumb also announced the launch of their Vietnamese platforms and entered the Vietnamese market. Recently, exchanges continue to lay out in this market. In June this year, the cryptocurrency exchange Blofin announced the launch of a Vietnamese-language page for its trading platform services in the Vietnamese market.

So, what trading platforms are available for users to choose from in Vietnam? What are the differences in products offered by these platforms for Vietnamese users, and what special benefits do they provide to users?

1. Mainstream international exchanges that entered Vietnam early

  • Binance’s C2C supports buying and selling cryptocurrencies with Vietnamese Dong (VND) using credit cards

Binance’s C2C business launched the buying and selling function with Vietnamese Dong (VND) as early as 2020, and supports users to directly purchase and sell BTC, USDT, ETH, BNB, BUSD, and other currencies using credit cards such as Visa.

According to its official Vietnamese page, Binance has listed over 350 cryptocurrencies with trading fees as low as 0.1%.

In 2022, Binance announced a strategic partnership with the Vietnam Blockchain Association (VBA), where they will jointly explore the research and application of blockchain technology and provide training for related talents in Vietnam.

  • OKX supports Vietnamese users to trade with VND

Compared to Binance, OKX had an earlier layout in the Vietnamese market. In 2018, its fiat trading zone opened VND trading services, supporting Vietnamese users to place VND trading orders and launched a Vietnamese version of contract trading products.

  • MEXC is well-known in Vietnam for its diverse asset types

For MEXC users, the main reason for choosing to use MEXC among many exchanges is its rich assets. Almost all kinds of innovative projects can be found on MEXC. It is reported that MEXC currently supports trading of over 1500 cryptocurrencies. MEXC supported the Vietnamese language version in August 2019.

  • Bybit’s trading volume in the Vietnamese market doubled in 2022

According to the “Bybit Next Level 2022” performance report released by Bybit in September 2022, its total trading volume in the Vietnamese market doubled (109%).

According to an interview with its founder, Ben, Bybit has been focusing on the Southeast Asian market since 2020.

One of the unique features of Bybit is that it does not require KYC for cryptocurrency trading, allowing investors to start trading with just an email and password. This makes Bybit a very attractive choice for Vietnamese investors. In addition, the platform provides channels for Vietnamese fiat currency deposits and withdrawals, offers zero fees for spot market trades in the short term, and has a dedicated customer service team to handle inquiries from Vietnamese customers.

  • Huobi quietly cultivated the Vietnamese market

At the same time as OKX, Huobi’s OTC trading zone started supporting VND trading for coin issuance and launched a Vietnamese version of the contract platform in 2019. According to industry insiders, Vietnam was a key overseas market that Huobi focused on in 2022 and provided a series of preferential policies to support Vietnamese partners, such as generous rebate ratios, attracting many professional traders with financial strength to join the platform. However, since October 2022, after Huobi was acquired by a fund under Hong Kong Baoyu Capital, the business of the Vietnamese station has been temporarily suspended.

According to data analyzed by the Statista platform, Huobi’s market share exceeded Binance for a short period of time in 2022.

  • BingX establishes a foothold in the local market through cooperation with Vietnamese KOLs

Derivatives trading platform BingX, formerly known as “BingBon Ice Cream,” changed its name in November 2021 and quickly gained a foothold in the Vietnamese market through cooperation with local Vietnamese KOLs. It has also set up an office in Vietnam. According to its year-end report in 2022, BingX has hired over 200 positions in its global offices in Germany, Turkey, South Korea, Vietnam, and other regions.

2. Vietnamese local trading platforms mostly use OTC

  • P2P trading platform Remitano

Remitano is a Vietnamese local peer-to-peer cryptocurrency trading platform established in 2014. It allows users to buy assets such as BTC, USDT, ETH, BNB, etc., in a peer-to-peer manner. Since the entry of other exchanges like Binance, Remitano has become an important venue for cryptocurrency trading in Vietnam and a major origin for Vietnamese OG players. However, due to the P2P trading model, each transaction requires confirmation from both parties, resulting in lower efficiency. As a result, overseas exchanges have competed for the market.

  • Vietnamese OTC trading platform BitcoinVN

BitcoinVN is the largest domestic cryptocurrency OTC trading platform in Vietnam. The platform supports both spot trading and fiat trading, including multiple fiat channels, including the Vietnamese Dong.

In summary, there are only a few localized exchanges in Vietnam, most of which are OTC platforms.

Cryptocurrency trading landscape in Vietnam: Overseas platforms dominate, users prefer large and secure exchanges

“The Vietnamese cryptocurrency market lacks mature local trading platforms, and foreign brands are the main choice for local investors.” This is a consensus among industry professionals familiar with the Vietnamese market. Currently, several cryptocurrency trading platforms have opened services in Vietnam. What is the current landscape of the Vietnamese exchange race? What criteria do Vietnamese local investors use to select exchanges?

In fact, the Vietnamese cryptocurrency market follows the 80-20 rule, with the top platforms occupying around 80% of the market share, while the remaining platforms share the remaining 20%.

The criteria for Vietnamese users to select exchanges are not much different from those in China. Mumu, a local Vietnamese person working in the cryptocurrency industry, stated that asset security and platform reliability are the primary criteria for Vietnamese users when choosing a trading platform. The next considerations include whether the website is user-friendly for Vietnamese users (such as supporting Vietnamese language, accepting Vietnamese Dong or local bank deposits and withdrawals), and the depth of asset liquidity on the platform. Additionally, factors such as the timeliness and professionalism of customer service, trading fees, and the variety of supported assets are also taken into account.

Furthermore, she added that the mindset of many Vietnamese people is similar to that of Chinese people. Just as Chinese users choose trading platforms, Vietnamese users also prioritize industry-leading platforms that support Vietnamese services when selecting exchanges.

Currently, the popular cryptocurrency platforms in the Vietnamese market are mostly platforms previously used by domestic users, such as Binance, Bybit, MEXC, etc.

According to SimilarWeb’s statistics on the traffic share of 5 trading platform websites, in the past year, Binance’s official website search traffic accounted for about 70% of the entire Vietnamese market’s website search traffic, followed by Remitano with about 10%, and then MEXC, OKX, Bybit, etc.

Tam, a Vietnamese cryptocurrency OG user, is not surprised by this statistical data. He explains that from personal experience and the data he has, this market share is basically in line with his predictions. In Vietnam, Binance has the largest market share, followed by Bybit, OKX, MEXC, and local platform Remitano.

He explains that Binance is currently the leading trading platform, relatively reliable in terms of security, supports a wide range of cryptocurrencies, and is a comprehensive exchange (supporting spot and derivatives trading). It is also very user-friendly for Vietnamese users (with a Vietnamese language page and supports the use of Vietnamese credit and bank cards), so most Vietnamese users will choose Binance. Remitano is widely used by many Vietnamese OG users, Bybit’s futures and other derivatives are excellent and have relatively low transaction fees, OKX has been early in its layout in Vietnam, and MEXC supports a wide range of assets. Of course, there are also some players who use other less well-known platforms or try out new platforms. However, this is not mainstream in Vietnam. Currently, the majority of platforms known and recognized in Vietnam are the leading platforms in the global cryptocurrency trading track and some platforms that have entered the Vietnamese market for some time and can provide their own advantages.

It can be seen that the competition pattern in the Vietnamese cryptocurrency trading market has entered a white-hot stage. Currently, it is mainly dominated by overseas leading platforms. If new entrants do not have some strategies or unique advantages, it will be difficult for them to break through in a short period of time.

Entering Vietnam is still a good opportunity, and operational strategies need to be tailored to the local market

Although the current competition in the Vietnamese cryptocurrency trading market seems quite sufficient, for a market with population growth dividends, whether it is an exchange or other Web3 projects, entering the Vietnamese market is still a good opportunity.

Tina, who has researched the Vietnamese market, agrees with this view. He said that many Web3 companies are already focusing on the Vietnamese market, especially this year. At the GM Vietnam Blockchain Week event hosted by Coin98 and Kyros Ventures in July, you could see booths of well-known global projects such as Polygon, Aptos, Coinbase, Chainlink, Avalanche, etc. and meet cryptocurrency enthusiasts from various countries. The conference was very international.

This is very different from the previous blockchain events in South Korea that I participated in. The events I participated in South Korea this year mainly had local participants, and there were very few foreign participants. On the other hand, the conferences held in Vietnam this year had very international participants, and the discussions were also very cutting-edge in the industry, such as the BRC20 event a few months ago. Some of the project initiators behind them are Vietnamese or Vietnamese communities. Earlier in the same month, the Vietnam Blockchain Association and Spores Network announced a partnership to launch the SwitchUp Web3 accelerator program in Vietnam, with more than 50 funds and international organizations investing to support Web3 startups in the Vietnam region.

He also said that the developers he encountered in Vietnam generally have a good command of English, which makes it a very convenient place to deploy projects that want to have a global presence. There are also many projects and training courses in Vietnamese universities that collaborate with blockchain companies, which can provide high-quality Web3 talents. In addition, Vietnamese users are willing to spend money and time to understand the knowledge of the cryptocurrency industry. Many Vietnamese friends are willing to spend tens of thousands of dollars to participate in blockchain-related training courses and learn how to trade cryptocurrencies and related development knowledge in their spare time.

However, in order to achieve success in the Vietnamese market, Web3 projects still need to develop operational strategies that align with local user habits.

Tina explained that, for example, in terms of social media channels, Vietnamese users prefer to use Facebook rather than Twitter and YouTube, so Web3 companies entering Vietnam should prioritize Facebook. In addition, some cryptocurrency communities in Vietnam have a strong appeal, such as BingX, which quickly gained a foothold in the Vietnamese market through cooperation with the community.

He also added that Vietnamese cryptocurrency users do not invest large amounts of money, with an average investment of 100 USD per person. The disclosed data from Binance also shows that Vietnamese users prefer high-risk futures trading and have a speculative nature. Companies should not neglect their services to users just because the investment amount is small. This is mainly because most cryptocurrency users who participate in investments are young people who have just entered the workforce and do not have high incomes at the moment. Therefore, their investment amounts are relatively low. However, this also means that as their salaries increase, the investment amounts will also increase in the future.

Of course, this does not mean that entering the Vietnamese market is without risks. The current greatest uncertainty comes from government regulations. Since there is currently no specific regulatory framework, Web3 projects are in a stage of wild development. Once regulatory policies are officially implemented, they will undoubtedly have an impact on some companies.

However, some people believe that when regulations are officially implemented, they may have a negative impact on the Web3 industry in the short term. But in the long run, clear regulations may encourage wider adoption, improve policies, and lay a foundation for individual investors and institutions to participate, providing greater protection for investors.

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