VIFC: Capital Doesn't Just Need a Destination — It Needs a Reason to Stay
Pham Nguyen Thanh Tam
This article was written by Pham Nguyen Thanh Tam, VP of Product and Technology at Hydra X. The original was published in Vietnamese in Kinh tế Sài Gòn on 9 April 2026. The English translation is reproduced here with permission.
Vietnam’s International Financial Centre (VIFC) must aim to direct capital to the right places, into the real economy, and keep it there long enough to generate sustainable growth. What the market actually cares about is not slogans or initial incentives, but four core capabilities: whether the rules of engagement are clear enough, whether dispute resolution is fast enough, whether capital flows in and out smoothly enough, and whether innovation is built on sufficiently solid foundations.
VIFC Is Not Just a Story for the Financial World
Some places are merely transit points for global capital. Others are places where capital stays long enough to become warehouses, seaports, digital infrastructure, growing businesses, better jobs, and new capabilities for the economy.
Take a logistics company wanting to build cold storage, a distribution centre, or a warehouse cluster near a port. The challenge is not simply access to financing. What’s needed is quality capital: long enough in tenor for assets with multi-year lifespans, stable enough for the company to plan with confidence, and flexible enough to accompany each phase of expansion. When capital markets are underdeveloped, this demand typically piles onto bank credit. But banks cannot indefinitely carry every long-term financing challenge in the economy.
Singapore shows a different path. In 2005, Mapletree Logistics Trust listed with 15 warehouses and logistics centres in Singapore. By 31 March 2025, that portfolio had grown to 180 logistics properties across nine markets, with a total value of approximately SGD 13.3 billion. What is notable is not just the scale. More importantly, rather than relying on old funding channels, very ordinary assets — warehouses, distribution centres, logistics infrastructure — were connected to new, long-term, diversified sources of capital.
VIFC is therefore not a story for the financial world alone. It directly serves the very concrete capital needs of the real economy. In that context, what is needed is not just attracting foreign capital, but building a foundation so that capital flows to the right places, stays long enough, and creates genuine value. That is the harder test — and the one worth doing.
Why This Has Become Urgent
In Vietnam, the need for long-term capital is no longer an abstract concept. It sits within the concrete development targets the government has set. Expressways are one example. By end-2025, the country is expected to have 3,188 kilometres; the target for 2030 is 5,000 kilometres. The remaining gap alone demands an enormous volume of capital.
Energy is even more pressing. Under the revised Power Development Plan VIII, total installed capacity serving domestic demand must reach approximately 183,291 to 236,363 MW by 2030; between 2030 and 2035, the Ninh Thuan nuclear power plants, with a capacity of 4,000 to 6,400 MW, must also be brought online.
And the story does not stop at hard infrastructure. The 14th Party Congress set a target for the digital economy to account for approximately 30% of GDP by 2030. In short, from roads and power to digital transformation, Vietnam’s biggest ambitions over the coming years all require large, long-horizon, patient capital.
New Competition on a Common Foundation
There is no single formula for building an international financial centre. Singapore is distinguished by stability and a predictable, smoothly operating market. Hong Kong’s strength lies in channelling international capital into the Chinese market, while continuously upgrading its trading and settlement infrastructure. Dubai created a distinct legal framework and independent dispute resolution for cross-border transactions. Luxembourg emerged as a major centre for investment funds.
Each found its own path, but the market ultimately returns to a few very basic questions: are the rules clear, is the regulator consistent, are disputes resolved effectively, and is the system open enough for capital to flow in, flow out, and keep circulating?
But those familiar tests are now measured against new standards. “Clear rules” no longer refers only to rules for equities, bonds, or investment funds, but also to how the market handles digital assets, cross-border payments, and transactions conducted in near real time. “Connectivity” no longer means simply opening the door to capital flows — it means ensuring money moves quickly, data travels with it, controls remain intact, and legal accountability does not blur as transactions cross multiple borders.
In other words, international financial centres today compete not on incentives alone. They compete on their ability to make the complexity of global finance into an operating experience that is clear, fast, and reliable enough that capital wants to stay. And as operating standards shift this quickly, international capital will become more selective.
What Opportunities Are Opening Up for Vietnam?
What is worth noting is that despite the many large international financial centres already in existence, there are still new gaps that have not been adequately addressed. For Vietnam, the meaningful opportunity lies not in building a financial centre that tries to do everything, but in resolving specific bottlenecks in cross-border capital flows.
Sending money overseas remains costly and slow: on average, for every USD 100 transferred, approximately USD 6.49 is lost in fees. According to the Bank for International Settlements (BIS), only around 35% of cross-border retail payment transactions are completed within one hour. Even blockchain technology — once expected to reshape the landscape — has yet to overcome barriers related to system interoperability, compliance, and legal accountability. So at what should be a very basic level, international money transfers remain expensive, slow, and inconvenient.
That cost and delay feeds into domestic pricing as well. For a textile and garment company, for instance, raw materials may need to be imported weeks in advance. When cross-border payments are both costly and slow to confirm, companies must hold more inventory to avoid supply disruptions. Inventory sitting longer means capital tied up longer, financing costs rise, and that pressure ultimately feeds into the cost of domestic production. A problem that appears to sit in the payments layer thus becomes a cost carried by domestic manufacturing.
Gaps like these suggest this may be one of those rare moments when Vietnam can not only catch up but potentially leap ahead, if it moves in the right direction. With so many new standards, technologies, and needs simultaneously taking shape, Vietnam has the opportunity to build a model that is leaner, more digital, and more convenient.
But the larger the opportunity, the more important it is that the foundations be laid early, cleanly, and solidly. Ultimately, what the market looks at first in VIFC comes down to four pillars: trust, speed, market operability, and controlled innovation.
Trust: Participating Because the Rules of Engagement Are Credible
Trust in finance does not mean risk disappears. No market can guarantee that. Trust only exists when participants know that risk is being identified, monitored, and managed within a clear framework.
For VIFC, that framework operates at three very specific levels: the rules of engagement must be clear; processes must be transparent, not dependent on interpretation or relationships; and enforcement must be effective enough to protect those who are affected.
Of the three, enforcement is decisive. Incentives can attract initial interest. But the first few cases are what shape market confidence. Where will the first dispute be resolved? How quickly? Will the ruling be persuasive? And most importantly, will the outcome actually be enforced? For investors, those questions carry more weight than promotional messaging.
Dubai is an instructive example. The DIFC Courts allow parties to pre-select their forum of jurisdiction in a contract, while the Small Claims Tribunal (SCT) handles smaller disputes quickly, efficiently, and in English. When the mechanism is sufficiently clear, the market responds: the number of cases choosing the SCT doubled in 2017, and 83% of cases were resolved within four weeks. For investors, trust is often simply knowing that if something goes wrong, there is somewhere clear and fast enough to resolve it.
And for that trust to be durable, the entry standards for participants must also align closely with international standards on risk management, transparency, and investor protection — not rely on reputation alone.
Speed : Fast but Not Careless
Next is the question of speed. In finance, moving fast is never simply about finishing sooner. Particularly in the age of AI, speed alone is no longer a rare advantage.
What the market needs is a kind of sustainable speed: safe enough, capable of handling pressure, and consistent when processing high volumes. Domestically, this is more achievable because transactions run on familiar infrastructure. But cross-border, every jurisdiction operates at a different pace, to a different standard, with a different approach to risk management.
Luxembourg illustrates the value of that kind of speed. It did not rise by becoming the centre of all financial activity. Instead, it solved the fragmentation problem in the European investment fund market. As the first country to transpose the common European fund regulation into national law (1988), Luxembourg created a fund model that was standardised, easy to understand, and trustworthy. That combination of speed, standardisation, and trust gave Luxembourg a dominant share of the European market.
The lesson is not complicated: to move fast without creating confusion, you first need clear visibility into where each application stands, who is handling it, what has been completed, and which rules apply. Once you have that clarity, the next step is standardising decision-making so that the same type of work is processed against the same criteria. And after that, true speed is only proven when something goes wrong — a technical failure, an operational disruption, a cybersecurity incident. A system is only worth trusting when it holds its rhythm on a bad day, not just a good one.
Market Operability: Capital Must Be Able to Enter, Exit, and Circulate
An IFC cannot stop at building trust and shortening processing times. It must also make the market actually work.
In practice, one of the first questions in venture capital is: if a company is on the right track, what is the exit path for the fund? That might be an IPO, a sale to a strategic investor, or a secondary transaction in a sufficiently liquid market. The OECD noted as far back as 2000 that the ability to exit via IPO is particularly important, because investors only commit capital when they can see a path to return. What they need is not just a growth story, but a clear exit. When the exit is unclear, the entry is harder to justify.
But to have a clear exit and sufficient market depth, markets cannot open faster than the supervisory and enforcement capacity can follow. When incentives run ahead of the systems for oversight, reporting, incident response, and dispute resolution, a market can appear vibrant on the surface while remaining fragile at the core. In that situation, capital may flow in quickly — but it can also flow out just as quickly after a few incidents.
For effective oversight, the range of permitted participants, the scope of their participation, the products they are allowed to offer, and the conditions governing capital movement must all be defined clearly from the outset. Market opening should also proceed in steps, so that the supervisory system can keep pace with transaction volumes and emerging risks.
Moreover, since VIFC is organised across two locations (Ho Chi Minh City and Da Nang), what matters is that while the surface may differ, the core must not be fragmented — from licensing and supervision to reporting, enforcement, and dispute resolution. Only when the core is sufficiently unified will the market have both depth and the flexibility to develop according to each location’s comparative strengths.
Sandbox: Innovation Without Gambling
The bottleneck for many fintechs is not just tight regulation — it is not knowing what regulators will accept, what is permitted under trial conditions, and how long the path forward will take.
The UK’s Financial Conduct Authority (FCA) addressed this by allowing companies to test products within a controlled framework, rather than building while guessing. When uncertainty decreases, the ability to raise capital and deploy also increases: the FCA has noted that companies going through the sandbox are 50% more likely to raise funding, and raise an average of 15% more than a comparable group that did not.
The lesson is: the clearer the sandbox, the faster innovation moves. The first step, therefore, is to define the scope of testing precisely — what is being tested, to solve what problem, for which user group, at what scale, over what timeframe, and within what limits. Accompanying this are minimum requirements: investor protection, anti-money laundering, cybersecurity, data governance, disclosure calibrated to risk level, and sufficient data trails for regulators to reconstruct the full process. You cannot build loosely and refine later, because in finance, a single misstep can cause people to lose confidence in the entire system.
It is worth distinguishing two approaches to sandbox design. The first is thematic design: the regulator starts by identifying which areas the market is focused on, then lists the categories of solutions that may be tested. The second is lane-based design. A testing lane should not be drawn around a technology or a product name, but around the economic purpose, the familiarity of the process, the scale of assets involved, and the target beneficiary group. The first approach tends to create the feeling of keeping up with trends. The second creates the conditions for long-term operability. Because trends change quickly, but the rails are what allow the system to continue processing innovations that do not yet exist today. When the principles governing the lanes are clear, regulators can set the right limits, reporting requirements, risk thresholds, and exit conditions for each group.
Within the framework those rails define, the content of experimentation can still be highly varied — AI, digital asset infrastructure, cross-border payments, digital identity, cybersecurity, or green finance.
Don’t Build VIFC on Misconceptions
If the above is a story about what VIFC needs to have, this final section addresses the misconceptions VIFC should not carry: ideas that sound appealing but can easily pull the whole design off course.
The first misconception is treating VIFC as an enlarged fintech playground, where anything new, anything generating attention, anything with a technology flavour is worth trying. That sounds energetic. But an international financial centre is not built on energy. It is built on stable rules of engagement.
The second is importing the “move fast and break things” spirit of consumer startups into financial infrastructure. For consumer applications, that approach may be acceptable. But for anything that directly touches money flows, payments, custody, or reconciliation, the margin for error is far smaller.
The third is thinking it is enough for the domestic market to find it convenient. It is not. VIFC must be designed from the outset to be legible, comprehensible, and credible to those on the outside.
The fourth is choosing the wrong guides. A national financial architecture cannot rest entirely on macro-level blueprints from purely advisory firms — skilled at designing vision but lacking operational scar tissue. Nor can it be shaped by the “break down every barrier” mindset of pure crypto platforms, which lack experience navigating rigorous legal compliance
What Does VIFC Need to Prove in Its Early Years?
In the first three to five years, what VIFC needs to prove is not breadth, but precision and coherence.
First, the fundamental market circuits — closely linked to the real economy, from cross-border payments to trade finance, supply chain financing, and the accompanying transaction, custody, and settlement infrastructure — must be functioning. Only then should it build toward larger assets requiring long-term capital. And more complex product layers should only be opened when liquidity, supervision, and incident response capability have already been tested under pressure. But the value of a financial centre cannot be measured by a few large deals. It only truly earns its place when it opens additional channels of capital access for small businesses, ordinary people, and communities that have historically been shut out.
The sandbox, in this progression, does not stand apart. It sits within each phase of development. What is familiar, closely tied to the real economy, and carries measurable risk can move first. What is newer, harder to supervise, or lacks sufficient data should be tested within a narrow scope, and scaled only once validated.
But the visible layer is only half the story. The other half lies in the back office: whether the systems for licensing, supervision, reporting, incident management, and disclosure actually operate as promised. That work attracts less attention — but it determines trust. VIFC therefore not only needs to perform, but to measure, monitor, and show the market clearly how it is
From Ambition to Real Value
In the end, the story of VIFC can be reduced to one simple point: if capital is to stay, the market must be both trustworthy and functional. Trust, speed, market operability, and space for controlled innovation are not four separate workstreams. They must be designed together from the outset, as parts of the same operating system. In the early years, that discipline matters more than expanding quickly.
From the perspective of a Vietnamese person who has lived and worked abroad for many years, what is worth hoping for in VIFC is not just the scale of its ambition. What is more worth hoping for is the sense that Vietnam wants to do something significant in a more disciplined, faster, and more internationally aligned way. But ambition only has value when accompanied by a structure solid enough to withstand the market’s first real test.
VIFC will not be remembered for its name or the number of institutions present in its early years. It will be remembered if it creates a better environment for Vietnamese businesses to grow, for Vietnamese people to find better work, and for the next generation to have more roads worth travelling. If it manages that, this is not just a financial project. It is a step-change in national capability.
(*) Vice President, Head of Product and Technology, Hydra X (Singapore) — a company operating in the field of digitalised capital market infrastructure and digital asset services, under applicable licensing in Singapore.
Box 1: Opening the Market in Phases
Phase 1 — Anchored to the Real Economy Prioritise transactions that directly serve trade and production, such as import/export payments, invoice financing, freight payments, and FX hedging tied to actual contracts. Ensure certain core products always have reasonably stable bid-ask pricing.
Phase 2 — Controlled Expansion Once reporting and supervision systems are stable, expand into a limited range of investment activities; add instruments to allow members to maintain liquidity.
Phase 3 — More Complex Instruments Only when the market is sufficiently liquid, supervision is robust, and incident response mechanisms have been tested should more complex instruments be introduced — such as derivatives or leveraged products — with liquidity increasingly driven by natural market transaction flows.
Box 2: Three Testing Lanes Requiring Different Governance
Lane 1 — Routine Business Flows For activities with a clear economic purpose, familiar processes, and high frequency: cross-border payments, supply chain financing, or transaction, custody, and settlement support infrastructure.
Lane 2 — Strategic Projects and Large Assets For priority projects or large-scale assets capable of attracting institutional capital: aviation, maritime, port and logistics, or transition financing such as sustainable aviation fuel and green hydrogen.
Lane 3 — Testing for Underserved Groups For financial solutions supporting small businesses, individuals, and vulnerable communities: climate resilience products for farmers, or adaptive financing models.
Hydra X is a configurable digital markets infrastructure platform built for regulated capital markets. The company provides full-stack coverage across tokenisation, custody, distribution, exchange, OMS, and RFQ/OTC trading.
English 
Vietnamese