Blockchain – a Potential Field for Technology Startups in Vietnam

In recent years, blockchain has made positive changes and created a prominent trend in Vietnam. With disruptive and diverse applications, blockchain is considered a fertile ground for technology startups and the startup ecosystem in our country. So how has blockchain made a difference in economic development?

Blockchain wave in Vietnam & initial achievements.

According to statistics of Infinity Blockchain Lab, blockchain is currently being applied in various fields in Vietnam such as financial services (more than 83%), supply chains (40%), public services (30) %), energy (30%), education (30%), etc. Many large enterprises have also integrated this technology into their business. For instance, Viettel Business Solutions Corporation has applied blockchain to manage personal health records, enabling all medical examination and treatment history of patients to be recorded, or Vietcombank used blockchain for VBC Digibank Bank to improve user experiences, etc. 

Blockchain is currently being applied in many fields in Vietnam.

The Vietnamese blockchain market is gradually making enormous strides and strengthening its position in the world market. According to the Vietnam Blockchain Association, among the top 200 global blockchain companies, 5-7 companies are founded by Vietnamese entrepreneurs. About 10 Vietnamese blockchain startups reach a market capitalization of over USD 100 million. Several “unicorns” have appeared such as VNG, VNLife, Sky Mavis, etc. In particular, the game Axie Infinity powered by Sky Mavis has thrived with a market capitalization of over USD 9.7 billion in less than 3 years. Up to now, Vietnam is leading the market with more than 200 blockchain games. According to Chainalysis’s report, a blockchain market analysis company (USA), Vietnam ranks first in terms of cryptocurrency adoption and ranks second in the DeFi adoption. 

Vietnam leads the crypto adoption index with a maximum score of 1 (Statistics from Chainalysis).

The potential of blockchain - fertile ground for Vietnamese technology startups 

Vietnam is one of the most potential markets for blockchain thanks to the country’s young population, with the middle class making up the majority, who are open to new technology. Additionally, the government began to develop policies to support startups, especially in the field of Industry 4.0. In 2018, Vietnam’s Ministry of Science and Technology issued Decision No. 2813/QD-BKHCN, approving a crucial national science and technology program titled “Research support, development and technology application of industry 4.0,” to be implemented by 2025. Accordingly, blockchain is ranked 2nd after AI in a range of key technology products.

The Vietnamese blockchain market is expected to grow by double digits between 2023 and 2027, providing a promising environment for the country's technology startups. According to MarketsandMarkets, the blockchain-related device market in Vietnam is estimated to reach approximately $2.5 billion by 2026, a fivefold increase from 2021. According to the General Statistics Office, by 2020, the number of blockchain startups in Vietnam has exceeded 80 projects. More than ten exchanges and roughly ten companies seeking capital via blockchain have been announced by Vietnamese companies, despite the fact that the majority of these businesses are headquartered in other countries. Kyber Network (approximately 52 million USD), TomoChain (7.5 million USD), and BigBOM (approximately 1 billion tokens) are examples of typical projects in raising capital in Vietnam that have made a major stir in the world.

Kyber has established the largest ecosystem on the Ethereum platform in just over a year of operation.

Furthermore, the formation of organizations such as the Vietnam Blockchain Association and the Vietnam Blockchain Union signified a new milestone in the Vietnamese science and technology industry. These organizations will serve as a place for professionals to meet, investigate, and test blockchain goods, services, and solutions in order to encourage the development of the blockchain ecosystem in particular, as well as the country's digital economy in general.

What is still hindering Vietnamese blockchain startups?

Although blockchain has various advantages and the potential for breakthrough, Vietnam now lacks a legal corridor for this industry. This is one of the primary reasons why Vietnamese blockchain companies frequently establish their headquarters outside of Vietnam in order to function and seek capital more easily. Since blockchain is still a relatively new term that has not been included in training programs in schools or educational institutions, Vietnam does not yet have specialist professionals for the industry. Currently, everyone is required to conduct their own research and learning in foreign documents or while working. Furthermore, the number of organizations that support blockchain companies is currently fairly limited. 

In the Mekong Delta, FUNDGO Startup and Innovation Fund is the organization prioritizing investment in technological initiatives, particularly blockchain. The Fund has a large network of partners and a team of experienced advisors in many fields, including technology, finance, legal, etc., who are dedicated to assisting blockchain companies from the advising stage to project implementation and promotion. FUNDGO has supported and invested in a number of outstanding technology projects, including Hesman Legend, HanaGold, and Run Together. Furthermore, the Fund collaborates to organize numerous programs and workshops to disseminate blockchain knowledge and skills to young people, contributing to the training of highly qualified human resources for the industry. 

FUNDGO actively collaborates with numerous organizations to hold workshops at regional universities and colleges to share blockchain knowledge.

As can be seen, blockchain is increasingly widely applied, creating numerous chances for both the blockchain market and domestic technology startups in the digital era. This will also serve as a lever to help Vietnam accelerate its growth and strengthen its position and competitiveness in the global market.