Vietnam Proposes Allowing Cryptocurrency as Collateral for Bank Loans in Landmark Reform

Vietnam’s Ministry of Finance has proposed amending the Law on Supporting SMEs to allow cryptocurrencies — explicitly citing Bitcoin — to be used as collateral for bank loans. The move aims to unlock liquidity from a large retail crypto market, improve SME access to credit (SMEs account for ~40% of GDP), and integrate digital assets into the formal banking system. Implementation is phased: the bill goes to the National Assembly in October 2025 and, if approved, would take effect on July 1, 2027, giving banks time to build custody, valuation, and risk-management systems. Markets could see increased demand for Bitcoin as it becomes usable for lending, but banks will likely apply conservative haircuts and margining due to crypto volatility. The proposal is broadly constructive for crypto adoption in Vietnam while highlighting regulatory, AML, and volatility risks that could temper near-term upside.