The 4.0 industrial revolution along with
the explosion of the Internet has created the basis for the forward leap in all
fields of life. The financial sector is not an exception and is directly
affected by science and technology. In addition to traditional finance, a
new type of finance has been formed with superior characteristics which are
appropriate for the current situation and actual needs, which is Fintech –
Financial Technology. Despite the advantages of Fintech, the process of
operating it faces certain difficulties including the legal challenges.
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Fintech Lawyers in
Vietnam
Fintech may utilize technologies being big
data, cloud computing, artificial intelligence, biometrics and blockchain…
There is no comprehensive legal framework for such at the present in Vietnam.
Hence, regulations on science, technology, information technology and
intellectual property can be applied depending on the nature of the matters
including Law on Intellectual Property, Law on Information Technology, Law on
High Technology, Law on Science and Technology, Law on Cyberinformation
Security and Cybersecurity Law. These regulations partly facilitate the
research, development and application of technological innovation together with
ensuring the protection of databases and related intellectual property.
In particular, digital payment is a big
part of Fintech. This sector is governed by Law on Credit Institutions, and
regulations on non-cash payments, intermediary payment services. The Prime
Minister also issued Decision 316 since March 9, 2021, allowing the use of
mobile money to pay for goods and services of small value. This is the legal
basis for the establishment of Fintech companies providing digital payment
services and for the use of this method by customers. Fintech application also
extend to Peer to Peer lending, asset management, and crypto currencies which
are not yet clearly regulated in Vietnam.
Because of the importance of making legal
regulations governing Fintech, Official Dispatch No. 2433/VPCP-KTTH dated
August 31, 2021 of the Government Office directed: “The State Bank of Vietnam
chairs and coordinates with relevant agencies to continue studying and
concretizing regulations on the pilot mechanism of P2P lending in the process
of developing and finalizing the draft Decree on a controlled trial mechanism.
Control (Regulatory Sandbox) financial technology activities in the banking
sector, report to competent authorities for consideration and decision in
accordance with the provisions of the Law on Promulgation of Legal Documents”.
On September 6th, 2021, the Government issued Resolution No.
100/NQ-CP approving the proposal to formulate a Decree on a mechanism for
controlled testing of Fintech activities in the field of the banking sector. In
April 2022, after the research process, the State Bank of Vietnam published the
Draft Decree on the controlled trial mechanism for Fintech activities in the
banking sector. This draft is still at the stage of seeking public comment and
has not been approved. The formation of the draft marks a new step in Vietnam’s
legal framework for Fintech, laying a solid foundation for the later birth of
the Decree.
In case the Draft is approved, the
Government will officially issue the Decree on Controlled Trial Mechanism for
Fintech in the banking sector. This Decree will serve as a basis for credit
institutions and financial technology companies to test Fintech technology in
their operations to a controlled extent. They can assess the effectiveness and
possible risks when using Fintech solutions. Based on the results of the
experiment, the legislature can identify issues that need to be corrected by
legislation to promulgate legal documents regulating Fintech in the banking
sector. If so, banking will be a pioneering field, leading to the formation of
Fintech regulations in other fields.
In the face of the strong and rapid
development of internet and its application, it is natural to have a separate
legal framework for Fintech in Vietnam in the future. Fintech lawyers in Vietnam whom
are interested in Fintech could also take part in the process of making the
contribution through the comments on draft law drawing from the practical cases
advising the clients. It is obvious that, some of the biggest companies in the
word are in the technology industry. Among them, Fintech is the fastest growing
start-up. The sooner legal framework on Fintech can be issued, the better for
Vietnam to snap up opportunities to attract investment and catch up with the
world.
Our Fintech, banking lawyers at ANT
Lawyers - a Law firm in Vietnam will always follow up
with development of legal framework in Fintech in Vietnam to provide update to
clients.
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