Could mass account closures disrupt Vietnam's economy or financial stability and how are regulators responding?
Executive summary
Vietnam’s central bank and regulators have moved to deactivate or close more than 86 million bank accounts labeled inactive or non‑compliant with new biometric/verification rules, a step officials frame as a “system cleanup” to fight fraud and support a cashless digital economy [1] [2]. International monitors and market analysts warn the banking system still needs stronger liquidity, capital buffers and macro‑prudential tools to withstand shocks even as growth momentum slows from 2024 highs [3] [4].
1. What happened and why regulators say it was necessary
The State Bank of Vietnam (SBV) and related authorities initiated large‑scale deactivation or termination of accounts that lacked updated biometric or identity verification, describing the purge as a system cleanup to curb fraud and cybercrime and to advance cashless payments and digital transformation [1] [2]. Officials link the move to broader national plans — including Project 06 and the 2021–2025 cashless payments strategy — and to recent SBV orders requiring biometric updates and transaction restrictions for unverified accounts from early 2025 [2] [5].
2. Scale and immediate effects on access and behavior
Reports and industry trackers put the figure at roughly 86 million accounts impacted — a large share of the roughly 200 million accounts on the books — with banks beginning closures or freezes in September 2025 and earlier transaction curbs applied to unverified accounts starting January 2025 [1] [5] [6]. Human‑rights and civil‑society observers warn the policy risks excluding rural, elderly, overseas citizens and political dissidents who cannot easily comply, even though regulators say funds are recoverable after in‑person verification [7].
3. Could mass closures destabilize the economy?
Available reporting does not show an immediate systemic banking collapse tied solely to account closures; however, the IMF and other multilateral reviews stress that Vietnam’s financial sector remains exposed to shocks and needs stronger liquidity and capital buffers and a beefed‑up macroprudential toolkit to anchor stability — vulnerabilities that large, abrupt administrative actions could exacerbate if they trigger runs, reduced confidence or shifts into less regulated stores of value [3] [4]. Analysts also point to structural issues — elevated credit risk, under‑capitalisation among smaller banks and legacy NPL concerns — that leave limited margin for disruptive shocks [8] [9].
4. Market and behavioral second‑order effects already visible
Multiple outlets and commentators report a surge in interest in crypto and decentralized alternatives as some Vietnamese users seek ways around perceived centralised controls, and analysts flag reputational and trust costs to banks and regulators that can push activity into informal channels [10] [11]. Financial‑market reporting from late 2025 shows market volatility and regulatory interventions in credit and bond markets — a reminder that Vietnam’s financial ecosystem had pre‑existing stress points before the account actions [12] [13].
5. How regulators are responding to stability risks
Regulators and international partners are publicly focused on shoring up resilience: the SBV and government have advanced new legal and supervisory measures (e.g., Law on Credit Institutions, Circulars), and IMF staff and directors have pressed for stronger liquidity/capital buffers, improved macroprudential tools, and better crisis preparedness and AML/CFT frameworks [3] [14] [4]. Domestically, authorities are pairing digital‑ID enforcement with claims that account holders can recover funds via verification, while also rolling out sandboxes and fintech frameworks to modernize oversight without throttling innovation [15] [2].
6. Competing narratives and hidden incentives
Official sources frame the purge as anti‑fraud modernization; critics and some independent commentators interpret it as state consolidation of financial controls that risks exclusion and surveillance. Commercial and crypto actors cast closures as proof of centralized finance fragility and use the episode to market alternatives [2] [11] [16]. Financial‑services advisers and the IMF emphasize a governance and capacity angle: the reforms are necessary but must be implemented with stronger transparency, institutional independence and consumer protections to avoid perverse side effects [17] [3].
7. What to watch next
Watch for (a) data on recovered versus permanently lost deposits and the speed of in‑person biometric re‑enrolment; (b) SBV balance‑sheet and liquidity indicators and any emergency liquidity or targeted support measures; (c) credit growth, nonperforming loan trends and market reactions in equity and bond markets; and (d) legal or political pushback over privacy and exclusion — areas highlighted in IMF and policy reviews as critical for avoiding financial‑stability spillovers [3] [4] [9].
Limitations: reporting in the provided sources documents the scale of deactivations and policy rationale, IMF/official assessments of systemic resilience, and commentary by critics and market observers, but available sources do not provide granular bank‑level liquidity data directly tying the account actions to any specific bank failures or a quantified macro shock.