Brazil and Vietnam Reshape Crypto Markets with Landmark Regulations

Two of the world’s most closely watched emerging markets have taken significant steps to formalize their positions on digital assets. Brazil has eliminated long-standing tax exemptions on crypto gains, replacing them with a flat 17.5% capital gains tax as part of a broader fiscal reform. Meanwhile, Vietnam passed a first-of-its-kind law recognizing digital assets and setting the stage for a nationwide digital technology strategy.

Vietnam Passes Groundbreaking Law Recognizing Crypto Assets, Aims to Become Digital Tech Powerhouse

The National Assembly of Vietnam officially approved the Law on Digital Technology Industry on June 14, ushering in a comprehensive legal framework for digital assets, artificial intelligence, and advanced technologies. The law, scheduled to take effect on Jan. 1, 2026, positions Vietnam as the first country globally to enact a standalone law dedicated entirely to the digital technology industry.

The new legislation provides long-awaited legal clarity for the crypto industry in Vietnam, recognizing digital assets and dividing them into two primary categories: virtual assets and crypto assets. Although both are based on encryption or digital technologies for their verification and transfer, they explicitly exclude securities, fiat-backed digital currencies, and other conventional financial instruments.

Vietnamese lawmakers vote to approve the Law on Digital Technology Industry (Source: VGP)

Under the new framework, the Vietnamese government is now responsible for defining specific business conditions and regulatory mechanisms for both asset categories, signaling a shift from a loosely regulated market to a structured environment that could attract institutional interest and innovation.

The law emphasizes strict compliance with cybersecurity standards and Anti-Money Laundering (AML) protocols, aligning Vietnam with international regulatory benchmarks, particularly those set by the Financial Action Task Force (FATF). Vietnam has been on the FATF’s “gray list” since 2023 due to concerns over money laundering and terrorist financing. The introduction of these new safeguards is expected to be a major step in addressing those issues.

By bringing crypto assets under formal supervision, the Vietnamese government hopes to mitigate risks associated with scams, fraudulent investment schemes, and unregulated platforms—issues that have plagued the country’s digital asset ecosystem in recent years.

A Response to Rising Crypto Crime

Vietnam’s crypto sector has experienced significant abuse by malicious actors, underscoring the urgency for regulatory reform. Earlier this year, Vietnamese authorities dismantled BitMiner, a fake crypto mining platform that defrauded over 200 investors of approximately 4 billion Vietnamese dong ($157,300). The operation claimed to be based in Dubai and sold fictitious mining packages and training programs.

In another major crackdown in December 2024, Hanoi City police intervened just in time to prevent 300 potential victims from investing in the “Million Smiles” crypto scam. That scheme promoted a fake in-house digital currency called QFS (Quantum Financial System), tricking more than 100 businesses and 400 individuals out of nearly 30 billion dong ($1.17 million) through fraudulent claims that included ties to ancestral treasures and spiritual guarantees.

Such cases have shown the need for robust consumer protections and legal definitions for crypto-related businesses—something this new law aims to deliver.

While the legal recognition of crypto assets has grabbed headlines, the law’s implications go far beyond digital currencies. It forms the cornerstone of Vietnam’s larger strategy to become a regional and global leader in digital innovation.

The legislation lays out broad incentives for companies working in critical areas such as semiconductors, artificial intelligence, and digital infrastructure. These include tax reductions, land-use incentives, and government-backed research and development grants. In particular, firms focused on core technologies like chip design and AI data centers are expected to benefit.

Provincial governments will also be required to launch programs that support workforce development, offering subsidies, scholarships, and training initiatives tailored to digital technologies. Moreover, Vietnam plans to overhaul its education system by integrating digital technology skills into national curricula, ensuring that students are equipped with the competencies needed for the digital age.

Vietnam's Role in the Emerging Digital Economy

Vietnam’s latest legislative initiative places it at the forefront of a global trend where emerging markets are leading the charge in crypto adoption. A recent survey by Consensys highlighted Vietnam as one of the fastest-growing digital asset markets, supported by a young, tech-savvy population and growing smartphone penetration.

International companies are already taking notice. Earlier this year, crypto derivatives exchange Bitget launched BitEXC, a custom-built trading platform tailored for Vietnamese users—an indication that global firms are preparing for a more regulated and accessible market.

As the country prepares for the law’s implementation in 2026, businesses and regulators alike are watching closely. If successful, Vietnam could become a model for digital policy frameworks, offering a blueprint for how to simultaneously foster innovation, protect consumers, and uphold international financial standards.

Brazil Ends Crypto Tax Exemptions with New Flat 17.5% Rate Under Provisional Measure 1303

Meanwhile, in a sweeping shift that could reshape the financial strategies of both retail and institutional investors, the Brazilian government has eliminated its longstanding tax exemption for small-scale crypto gains and implemented a flat 17.5% capital gains tax on all digital asset profits. The change comes under Provisional Measure 1303, part of a broader government initiative to increase public revenue through financial market taxation.

Provisional Measure 1303 (Source: Brazil Government)

Previously, Brazilian residents were exempt from paying income tax on crypto sales under 35,000 Brazilian reals (roughly $6,300) per month. Above that threshold, capital gains were taxed on a progressive scale ranging from 15% to 22.5%, with the highest bracket applying to trades exceeding 30 million reals.

Effective as of June 12, 2025, the new regime removes these thresholds, enforcing a uniform 17.5% tax rate across the board—regardless of transaction volume, wallet size, or investor type.

Impact on Retail and Wealthy Investors

The move marks a dramatic departure from a system that many small traders had relied on for tax relief. Under the old rules, small monthly trades went untaxed, allowing casual or beginner investors to explore crypto markets without immediate tax burdens. Now, even modest gains will be subject to the new flat rate, raising the barrier for entry and dampening enthusiasm among low-capital participants.

Conversely, high-net-worth individuals and institutional traders may benefit from the flat tax, which could lower their effective tax liability. Under the previous system, large transactions—particularly those above 5 million reals—were subject to tax rates up to 22.5%. With the 17.5% cap now in place, Brazil's wealthier investors could see reduced tax bills on large-scale crypto activity.

Perhaps more significantly, Provisional Measure 1303 expands the tax base to include self-custodied crypto wallets and foreign-held digital assets, making it harder for investors to sidestep local tax obligations through offshore strategies.

According to local reporting from Portal do Bitcoin, the measure introduces quarterly tax assessments, giving investors the ability to offset losses over a rolling five-quarter period. However, this window will be reduced starting in 2026, tightening loss recovery options.

The inclusion of self-custody wallets means that even crypto not held on centralized exchanges—long considered a regulatory gray area—will now be monitored for capital gains. Investors who previously stored funds in private wallets to avoid surveillance may now be compelled to declare holdings and gains under stricter transparency requirements.

Other Financial Sectors Affected

The government’s changes are not limited to crypto. Several once-exempt financial instruments are also being pulled into the tax net. Profits from Agribusiness and Real Estate Credit Letters (LCAs and LCIs) as well as Receivables Certificates (CRIs and CRAs) will now face a 5% income tax, ending their tax-free status.

Meanwhile, revenue generated from betting and gambling has also been hit, with tax rates rising from 12% to 18%, further reflecting the government’s aggressive stance on extracting revenue from non-traditional financial sectors.

These updates follow political backlash from an earlier attempt by Brazil’s Finance Ministry to increase the Financial Transaction Tax (IOF)—a plan that was ultimately abandoned amid strong opposition from both Congress and financial industry stakeholders.

Brazil’s tax overhaul comes at a time when global regulators are tightening their grip on the cryptocurrency sector, particularly in emerging economies with large unbanked populations and rapidly growing crypto user bases. As the world’s seventh-largest crypto market, Brazil has historically embraced digital assets as tools for financial inclusion and inflation protection.

But this latest pivot demonstrates the Brazilian government’s growing concern over unregulated capital flows, offshore tax evasion, and rising crypto-linked fraud, all while seeking new avenues to fund social programs and infrastructure.

Bitcoin for Wages? Brazil Considers Crypto Salaries

In March 2025, Brazilian lawmakers introduced a bill proposing that employers be allowed to pay up to 50% of wages in cryptocurrency, such as Bitcoin. The bill, still under discussion, would prohibit full crypto-based salary payments for standard employees but permit full payment in digital assets for foreign workers and independent contractors, provided agreements are contractually defined.

All payments would need to reference official exchange rates determined by institutions authorized by the Central Bank of Brazil, ensuring price stability and transparency in salary conversions.

While the bill has not yet passed, it represents the country’s dual-track approach: tighten regulation while enabling innovation. If approved, it could make Brazil one of the first major economies to formally embrace crypto-denominated wages under a centralized regulatory structure.