Overview of Transformation in Vietnam

By 2045, Vietnam aims to achieve high-income status. According to the World Population Review, a high-income country is classified as one with a gross national income (GNI) per capita of $12,696 or higher. With a population just shy of 100 million people, the country of Vietnam holds the potential for such change. While the nation’s leaders have set ambitious goals, it seems as if the country is on track to a prosperous economy. According to Carolyn Turk, World Bank country director for Vietnam, “Vietnam’s GDP per capita has increased fivefold over the past three decades.” In 2021, the country’s GNI per capita was $3,560. The nation has found success in becoming an “export-led economy that relies on foreign capital.” However, this model of economy is not sustainable as the country lacks the infrastructure to generate adequate income on its own. As a result, the leaders of Vietnam have begun to encourage institutional reforms across the country as well as “boost … results in several key areas – green growth, digital transformation, financial inclusion, social protection and infrastructure upgrading.” Specifically, the government has made strides in implementing digital innovation in Vietnam.

Vietnam’s Digital Identity System

Similar to Morocco’s National Electronic Identity Cards (CNIE), Vietnam has also rolled out its own version of a Digital Identity System. Pioneering this project is the country’s Minister of Public Security (MOPS) along with the help of NEC APAC and its Automated Biometric Identification System (ABIS). On their website, NEC describes themselves as “a leading information and communications technology provider … [that] provides innovative solutions and infrastructure to promote safety, security and enhance the quality of life for individuals.”

The joint team started implementing the new digital ID system in July of 2021, and since then, the Vietnam government has been able to issue more than 50 million digital ID cards to citizens throughout the country. These new card makes it easier for Vietnam citizens to verify their identity across in-person and online services. Furthermore, the digital ID cards make it much harder for identity fraud and theft – ultimately making identification more secure. Masakazu Yamashina, the executive vice president of NEC, said in a statement: “NEC is proud to play a part in supporting Vietnam’s digital transformation efforts with the modernization of the country’s national ID. Our industry-leading biometric and AI-based solutions have also been deployed widely in areas including border controls … and we will continue our innovation to further contribute to Vietnam’s digital transformation.”

Furthermore,  the Vietnam government intends to transition from a traditional paper filing system to a digital database and management system for identification. The NEC has already onboarded 16 million documents onto the new digitized system – changing the pace of digital innovation in Vietnam

Digital Assets in Vietnam

In 2017, the government of Vietnam issued the ban of cryptocurrency as a means of payment. Despite the law taking place from the beginning of 2018, Vietnam is still a cryptocurrency hub. According to Statista, almost 27% of Vietnamese citizens have indicated that they have either owned or used cryptocurrencies in 2021. This ranks Vietnam as the “second in the world for the value of retail and all on-chain cryptocurrency transactions.” While cryptocurrency is already huge in the country, there exists favorable conditions for its expansion as cashless payment methods are increasing amongst Vietnamese. 

Now in more recent times, the Vietnamese government has tasked the Ministry of Finance (MoF) with developing a legal framework for cryptocurrency and all virtual assets. The MoF has formed a research team that actively studies the implementation of cryptocurrencies. If implemented successfully, Vietnam has the potential to create a secure cryptocurrency environment that will bolster the country’s economy.

It is also important to note that the once thriving  NFT game Axie Infinity originated from Vietnam. The company behind the play-to-earn game, Sky Mavis, is legally based in Singapore; however, the majority of its core members are Vietnamese, including CEO Nguyen Thanh Trung. This makes Sky Mavis Vietnam’s newest unicron company.

ABOUT THE WRITER 

Daniel Shin is a contributor to Identity Review from the University of Southern California.

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