As non-cash payments continue to surge in Vietnam, the requirement for strong security standards and a clear legislative framework for intermediary payment services (“IPS”) is becoming more and more critical. Recognizing this, the State Bank of Vietnam (“SBV”) has been working on a draft decree to supersede the outdated Decree No. 101/2012/ND-CP dated November 22, 2012, on non-cash payments (“Draft Non-Cash Payment Decree”), which will lay the groundwork for non-cash payments in general and the provision of IPS in particular. Building upon this, the SBV recently issued a draft circular to replace Circular No. 39/2014/TT-NHNN dated December 11, 2014, on IPS (“Circular 39”) (“Draft IPS Circular”), which will offer more detailed guidance on the provision of IPS in Vietnam on top of the Draft Non-Cash Payment Decree. The Draft IPS Circular will be applicable to (i) IPS providers; (ii) foreign organizations providing IPS in Vietnam; and (iii) organizations and individuals involved in the provision of IPS. Some key updates regarding the Draft IPS Circular are as follows: Scope of Application The Draft IPS Circular sets out further guidance for the provision of IPS as listed under the Draft Non-Cash Payment Decree, including: (i) electronic clearing services; (ii) electronic wallet (“e-wallet”) services; (iii) collection and payment support services; (iv) financial switching services; (v) international financial switching services; and (vi) electronic payment gateway services. Notably, the Draft IPS Circular has explicitly excluded from its scope of application the provision of accounts by goods/service providers to their customers solely for the purpose of payment within the systems of such providers (e.g., cards/coupons or service/transaction accounts of online game service providers, transportation service providers, or securities companies, etc.). Requirements on the Provision of IPS Electronic Clearing Services: The Draft IPS Circular introduces regulations to cover certain elements of electronic clearing services that have

On March 25, 2024, Thailand’s Securities and Exchange Commission (SEC) published an amendment to its Notification re: Public Digital Token Offering to strengthen governance for initial coin offerings (ICOs). The amendments took effect on April 16, 2024, and reflect the SEC’s commitment to creating a safer and more transparent ICO environment, enhancing investor protection, and building confidence in ICOs as a fundraising tool. The key changes are outlined below: New Checks and Balances Requirements The new regulations require digital token issuers to implement checks and balances to protect investor rights—including an annual audit requirement and measures to prevent and manage conflicts of interest. These measures must be clearly disclosed in the ICO filing documents. In addition, certain project-related decisions must be approved by the issuer’s board of directors, which is also responsible for the accountability of such decisions. Improved Rules Concerning Voting Rights The SEC has introduced rules concerning voting rights and procedures for digital token holders, particularly for token types that previously lacked regulatory clarity. These rules specify the procedures for soliciting votes, the rationale behind vote requests, and the criteria for determining voting outcomes. The new rules, however, do not apply to real estate-backed tokens or infrastructure-backed tokens. Enhanced Advertising Regulations The SEC has revised advertising guidelines to ensure that investors receive essential information. The updated rules now require all ICO advertising to be fair and informative and to avoid misleading content. Advertisements must include appropriate risk warnings and a credible source for any claims made. The notification also stresses that it is the responsibility of digital token issuers to strictly supervise and ensure that those who create advertisements with or for an issuer comply with all relevant advertising regulations, including the following: Warning of investment risk: Advertisements must include warnings about investment risks and contact information

The Bank of Thailand (BOT) has opened a public comment period on their consultation paper titled “Criteria for Supervising Virtual Banks” from March 19, 2024, to April 17, 2024. The consultation paper reveals that the BOT intends to apply traditional commercial bank supervisory standards to virtual banks. However, the BOT also explains that the wholly digital nature of the services offered by virtual banks necessitates additional regulatory supervision. Additional Supervisory Criteria for Virtual Banks Financial business group: If a virtual bank is within the same financial business group as other financial institutions, its parent company must structure the virtual bank to be under its own sole consolidated financial business group. After the virtual bank has undergone the “restricted phase” in its initial years of operation (see below), other financial institutions within the group are prohibited from extending credit to or engaging in transactions similar to lending activities with the virtual bank. Shareholding structure: If the increase in the financial institution system capital is higher than the actual capital injection resulting from the bank’s shareholding structure, the BOT aims to issue an additional regulation to supervise the capital of the virtual bank and financial institution system to prevent double counting. Operational risk: Virtual banks must not use a trademark or logo that bears resemblance to or implies association with other financial institutions or financial institution groups. Governance: Virtual banks must have at least one director and chief technology officer (CTO) with at least three years of experience in IT or digital service. Additionally, the CTO must work full-time for the virtual bank and may not be an employee of another legal entity. Restriction on related lending and related-party transactions: Virtual banks must obtain prior unanimous approval from their boards of directors before engaging in transactions with major shareholders or businesses

Vietnam’s fintech industry is booming, and the rapid emergence of tech startups and non-bank institutions offering innovative financial services has been outpacing existing regulations. This regulatory gap not only creates uncertainty for both innovators and consumers, but also poses a number of imminent risks in areas such as consumer protection, data privacy, cybersecurity, and anti-money laundering, among others. The State Bank of Vietnam (SBV) is stepping up to tackle these challenges by accelerating the promulgation of a long-awaited Fintech Sandbox Decree with the issuance of an updated draft (“Draft Fintech Sandbox Decree”) on March 4, 2024. The Draft Fintech Sandbox Decree establishes a controlled environment where fintech companies and financial institutions can test solutions that do not fall squarely within the parameters of existing regulations. The pilot activities will be limited in scope, scale, and duration, with a number of precautionary measures in place. The SBV will supervise this “sandbox” closely, effectively mitigating risks and gathering valuable data to inform future regulations. Who Can Participate in the Sandbox? Traditional financial institutions (credit institutions): Banks and other institutions licensed to provide financial services can participate in the sandbox to test new offerings or refine existing ones. Independent fintech companies: Startups and established companies specializing in fintech solutions can leverage the sandbox to pilot innovative ideas before seeking wider market adoption. Other relevant organizations involved in the pilot: Depending on the specific solution being tested, other entities may also be involved in the sandbox. Geographical scope: Limited to Vietnamese territory; cross-border testing is not allowed. Focusing on Three Solution Categories Earlier versions of the Draft Fintech Sandbox Decree included categories like blockchain technology and other innovative business models, but these were removed in the latest version. To allow the SBV to assess the associated risks and work on the solutions more