In the rapidly evolving landscape of the digital economy, the concepts of Blockchain and digital assets have emerged as pivotal elements. As businesses and individuals increasingly engage with these technologies, understanding their legal implications becomes essential. This article explores the definitions of Blockchain and digital assets, their development trends, and the current legal framework governing them in Vietnam.
- Definition of Blockchain and Digital Assets
- What is Blockchain?
Blockchain is regarded as one of the fastest keys to unlocking the digital economy. Many startups are actively developing products and services based on Blockchain technology. So, what exactly is Blockchain?
Blockchain is a technology that encodes all data into different blocks and connects these blocks to form a long chain. Currently, it is most commonly applied in cryptocurrency systems to maintain secure and decentralized transaction records. Additionally, Blockchain is utilized in various industries to prevent data alteration or fraud.
The advantages of using Blockchain include the fact that information is not stored on a single server; instead, it can be automatically backed up and distributed across multiple servers connected to the Blockchain system. This ensures that many users can safely and easily view and verify their transactions.
- What are Digital Assets?
Digital assets are an integral concept when discussing Blockchain. Simply put, digital assets are anything stored and transmitted electronically through computers or other digital devices, linked to ownership or usage rights.
While they cannot be physically held, stakeholders can still buy, sell, store, or use digital assets for online transactions. Common types of digital assets include:
- Cryptocurrencies: Bitcoin, Ethereum, etc.
- Digital content: eBooks, music, etc.
- In-game assets
- Digitized physical assets: Physical artwork, financial assets such as real estate and securities.
2. Development Trends of Blockchain and Digital Assets
In recent years, Blockchain and digital assets have been experiencing rapid growth. One of the leading technologies prioritized for research, development, and application to actively participate in the Fourth Industrial Revolution in Vietnam is Blockchain.
According to a research report by Digital Assets – Worldwide/Statista Market Forecast, over 2 billion transactions worth a total of $1.4 trillion occurred in cryptocurrency activities in 2021. That same year, Vietnam ranked 11th globally with 6.1% of the population and was among the top 20 countries with the highest percentage of cryptocurrency ownership. Consequently, the Vietnamese government has approved numerous initiatives to implement and manage emerging technologies, with Blockchain and digital assets being prioritized for research and development.
Due to the significant advancement of Blockchain technology alongside digital assets, legal regulations concerning property, financial markets, and taxation are being amended to align with ongoing developments.
3. Legal Regulations on Blockchain and Digital Assets in Vietnam
Vietnamese law lacks a comprehensive legal framework governing Blockchain and does not formally recognize ownership rights for digital assets. However, transactions involving the exchange, buying, and selling of digital assets are becoming increasingly common. This rise correlates with a growing number of disputes related to digital asset exchanges, particularly regarding cryptocurrencies.
Currently, assets such as digital content (eBooks, music, etc.), in-game intangible assets, and physical artworks are protected under intellectual property law, similar to other works. This protection includes moral rights and property rights. However, regarding trademark protection, Vietnam follows the “first to file” principle. If a digital work is not registered, the owner will not be protected under trademark law.
In addition to intellectual property, the digital technology sector is undergoing amendments to integrate regulations governing Blockchain and digital assets. The Digital Technology Industry Law is currently being drafted and is expected to be completed for submission to the National Assembly by May 2025. Furthermore, other related legal regulations are also being revised for practical implementation.
These new regulations promise to establish a comprehensive legal framework, creating a favorable environment for the information technology sector, particularly Blockchain, to develop comprehensively. Additionally, they will serve as a basis for protecting the rights and interests of individuals and organizations using Blockchain and holding ownership of digital assets.
Excerpts from the Draft Digital Technology Industry Law
“Digital assets are defined as intangible assets represented in digital data, created, issued, stored, transferred, and verified by digital technology in an electronic environment and protected by law in alignment with civil law, intellectual property law, and other relevant legal provisions.
Cryptographic assets are a type of digital asset created, issued, stored, transferred, and verified using Blockchain technology, distributed ledger technology, or other similar digital technologies.”
In conclusion, the intersection of Blockchain technology and digital assets presents both opportunities and challenges in the digital economy. As Vietnam moves towards a more structured legal framework, it is crucial for stakeholders to stay informed about these developments. Effective regulation will not only foster innovation but also ensure the protection of rights and interests for all involved parties, paving the way for a more robust digital economy.
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1. Lawyer Vu Thi Phuong Thanh, Manager of TLA Law LLC, Ha Noi Bar Association
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Dinh Phuong Thao