NA deputies debate flexible credit rules, crypto assets in banking reform

Deputies of Vietnam's National Assembly debated proposed changes to banking regulations, with a focus on the flexibility of credit rules and the inclusion of crypto assets in the reform. Concerns were raised over vague "alternative safety metrics" that could be applied inconsistently when monitoring crypto assets and combating cross-border money laundering.

Deputy Do Duc Hien, from Ho Chi Minh City, suggested the need for clearer guidelines on the application of these metrics, including their timeframe and supervisory protocols. Deputy Tran Thi Hien, representing Ninh Bình Province, expressed fears that the concept of alternative safety metrics could be exploited, exposing the financial system to systemic risk.

She proposed specifying whether these metrics would exceed or fall below standard thresholds and providing clear enforcement prerequisites and timelines. In discussions about the Law on Credit Institutions, Deputy Nguyen Thanh Tung highlighted the challenges commercial banks face due to existing caps on credit growth and statutory safety ratios.

He advocated for operational flexibility in applying these indicators based on each bank's specific circumstances. Regarding the corporate bond market, Deputy Nguyen Thanh Tung supported allowing credit institutions to act as collateral management agents for corporate bonds. He pointed out that Vietnam's bond market size is only 10% of GDP compared to regional peers, while bank credit burden is excessive at 145% of GDP.

Permitting banks to play this role would increase investor confidence and promote market development. Deputy Nguyen Thanh Tung also endorsed adding provisions to the Law on Anti-Money Laundering that would classify crypto-asset service providers as reporting entities. This move, he argued, would help Vietnam move off the Financial Action Task Force's "grey list."

However, Deputy Nguyen Thanh Tung warned that practical enforcement challenges persist. These include identifying crypto-asset risks due to their decentralization, cross-border reach, and rapid transaction speeds; the high technological compliance costs necessitating AI rather than manual labor; balancing regulatory oversight with customer experience; and enhancing inter-agency and international cooperation to share intelligence and conduct joint supervision.

Deputy Tran Thi Hien proposed including transitional provisions in the Law on Anti-Money Laundering for customer relationships established before the law's effective date. This would ensure a smoother rollout for credit institutions and mitigate sudden compliance costs.