During the past several decades, Vietnam has shown what the World Bank describes as a “resilient” economy, thanks to rapid GDP growth. Society-wide, overall health and education outcomes have risen in recent years and the rate of extreme poverty dropped to 3%. This year, Vietnam’s economic growth could reach 6.7%. However, there’s still plenty of room for improvement.
Looking at financial inclusion alone, only 31% of adults in Vietnam have bank accounts. But smartphone ownership is on the rise, with 40% of the population expected to own these devices by 2021, which means app-based, blockchain financial services could bring the underbanked into the fold.
Instead of struggling to secure credit or invest their money, more people could grow their wealth and establish financial histories. “This presents excellent opportunities for Vietnamese startups to bootstrap their ideas and grow their user base, specifically by tapping in our massive underbanked population,” says Nicole Nguyen, head of corporate marketing at Vietnam’s Infinity Blockchain Labs.
It’s clear that interest in blockchain technologies is growing rapidly in the country. Earlier this month, more than 2,000 people attended the Blockchain Week conference, a two-day event held in Ho Chi Minh City and organized by Infinity Blockchain Labs.
Headquartered in Ho Chi Minh City, Infinity Blockchain Labs is a research and development company that focuses on the use of blockchain technology in fintech and regtech. Part of its mission is to “connect the dots and bring together key ecosystem players in Vietnam to sustainably grow [the] blockchain industry in the country,” as Nguyen describes it.
Roughly 2,000 people attended the event, and much of the conversation centered around Vietnam’s potential role in the global blockchain ecosystem. “Vietnam is one of the most dynamic tech hubs in the world,” Nguyen explains. “Vietnam [has] huge opportunities to leverage its robust tech talents and tech-savvy communities to bootstrap numerous startup projects.”
Blockchain for economic development
As “Blockchain Revolution” authors Don Tapscott and Alex Tapscott said in an interview with McKinsey & Company, blockchain can also be used to better document land titles around the world, providing a layer of legal protection for rural farmers. Academics Rob Gower and Jukka Aminoff wrote that blockchain technology could create “a more digitally integrated global economy, something that could enhance economic growth and decrease poverty.”
Despite its praise of Vietnam’s economic development, the World Bank has also noted that the country’s improvements in poverty-related outcomes remain tenuous. The organization said that people who make their livings through agriculture remain especially vulnerable to economic uncertainty. Agriculture is another area in which blockchain can support growth and increased prosperity via improved logistics, reduced transaction costs, and better product tracking.
Of course, it’s not all smooth sailing when it comes to building blockchain solutions for the Vietnamese market, but Nguyen says the opportunities outnumber the obstacles. Despite “challenges such as the absence of regulatory framework [and] low awareness,” she says, “I believe this is just the start for Vietnam to identify and realize blockchain potentials.”
Fertile ground for innovation
Judging by the response at the recent Blockchain Week conference, the enthusiasm for such solutions is growing. Nguyen says interest in blockchain has spiked in Vietnam within the past 12 months, and she sees that trend accelerating. She also predicts that explorations of blockchain applications will include fintech, insuretech, agrictech, medical fields and Internet of Things (IoT) products and services.
“Thanks to strong programming skills and [a] dynamic community, Vietnamese startups are now eyeing … building applications beyond cryptocurrency,” Nguyen says. “This in the long run will help strategically position the country [on] the global blockchain map.”
Vietnam’s startup ecosystem has become increasingly dynamic, and it may well provide fertile ground for developing in blockchain applications. The government has expressed strong support of local startups and initiated a plan to provide resources and training to tech companies during the next several years. Eddie Thai, a partner in 500 Startups’ Vietnam fund, predicted that, “In 30 years, Vietnam has a chance to be a top 30 economy. As importantly, it has a chance to be a hub of innovation for the developing world.” If Nguyen and the team at Infinity Blockchain Labs are right, blockchain will be a key component in making that happen.