211

Blockchain and Banking

economic potential while protecting consumers and investors from fraudulent prac­

tices (Osmani et al., 2020). Briefly, by releasing crypto assets and cryptocurrency,

the application promotion environment, the advancement of blockchain technology,

and defining responsible entities, the related legal structure mobilizes resources.

It is responsible for the monitoring and enforcement of protocols for blockchain

(Cermeño, 2016).

12.5  BLOCKCHAIN TECHNOLOGY IN THE

BANKING SYSTEM – A TYPICAL CASE STUDY

IN A DEVELOPING COUNTRY

12.5.1  Banking Overview in Vietnam

Vietnam’s population is more than 96 million individuals, according to the Vietnam

Statistical Office (General Statistics Office of Vietnam, 2019), of which 69.3% is the

proportion of the population aged 15 to 64. Simultaneously, according to WeareSocial

and Hootsuite (2020), approximately 64 million Vietnamese people use the Internet,

accounting for 66% of the population in 2019. Also, WeareSocial and Hootsuite

(2020) reveals that 52% of people use the Internet to buy online (52% worldwide

average) and that the percentage of non-cash purchases is 47% (60% worldwide aver­

age). It can be seen that Vietnam is a potential market for the use of information

technology goods and services, a fertile piece of cake that gives massive profits to

commercial banks (Nguyen et al., 2020).

Following the country’s growth, Decree 53/HDBT was issued by the Council of

Ministers on 26 March 1988, with a two-level banking structure comprising the State

Bank and four commercial banks. After more than 30 years of growth, the number of

banks has dramatically developed in terms of quantity and quality: 100% of foreign-

owned banks, joint venture banks and credit institutions can participate in the bank­

ing industry (Dao et al., 2020; 2021). The rivalry in the banking and finance sectors

over globalization and international economic integration is also fierce. Therefore,

commercial banks need to diversify goods and services to thrive and expand while

providing customers with optimal facilities and applying financial technology. One

of the strategic advantages of commercial banks is blockchain technology for trans­

actions between banking products and services.

A milestone of using blockchain in Vietnam occurred when Techcombank

pioneered blockchain technology in Vietnam in 2015 for consumer transactions.

Techcombank offered to lose an annual remittance fee of 2–3 billion dong and invest

USD 30 million in blockchain technology so that customers could make use of mod­

ern utilities and free transfer of money inside and outside the bank. The advantages

that Techcombank has achieved after 5 years of product and service growth are

that it is gaining 5 million customers per year, profit after tax in 2019 is 6.7 times

higher than in 2015, and equity in 2019 will rise 3.8 times compared with 2015

(Techcombank, 2020). In addition, the NAPAS (2020), Techcombank was honoured

as Outstanding Performance Bank and awarded the “Leading Bank for Interbank

Money Transfer Service 24/7 banking”.