Vietnam Eyes Crypto, Circle Freezes USDC, BTC ETFs Drop

Vietnam’s Ministry of Finance has proposed allowing small and medium-sized enterprises to use digital and virtual assets, intellectual property and other intangible rights as collateral when seeking bank loans. The proposal is part of a draft revision to the country’s Law on Support for Small and Medium Enterprises and is open for public consultation.

The draft would let businesses pledge future-formed assets, property rights, intangible assets and digital or virtual assets to secure credit. The ministry noted that SMEs and household businesses account for more than 98% of enterprises in Vietnam, while outstanding loans to the sector represent about 20% of total bank credit. Officials cited a shortage of eligible collateral, limited financial transparency and small capital bases as factors restricting formal lending to many firms.

The proposal targets firms that lack land or physical assets but hold software, patents or other intellectual property. The draft aims to expand the types of assets banks can accept when assessing loans to technology-focused startups and other small businesses.

In the United States, Circle, issuer of the USDC stablecoin, froze roughly $12.6 million in USDC tokens tied to the Zama privacy protocol’s confidential USDC smart contract on Saturday. The exact reason for the freeze was not disclosed.

On-chain investigator ZachXBT flagged the action and pointed to more than 16 prior incidents in which Circle froze wallets. ZachXBT also identified deposits from a decentralized finance protocol called Overnight Finance, which moved about $12.4 million into the Zama contract earlier in May and is facing a civil court case. On social media, ZachXBT wrote: “Overnight Finance held a governance vote recently to distribute treasury funds after holders alleged the team was rug-pulling. Regardless, it’s precedent-setting to unilaterally freeze the contracts or addresses of a protocol where funds have been commingled with Zama users.”

Some users and analysts in the crypto community criticized Circle’s freeze, arguing the company has restricted wallets linked to legitimate users while not acting quickly to freeze addresses tied to large hacks or stolen funds. Circle did not provide a public explanation for the latest freezes.

Separately, spot Bitcoin exchange-traded funds recorded ten consecutive trading days of net outflows, with total redemptions of about $2.97 billion since May 15. Daily outflows in the period ranged from roughly $70 million to $733 million, with the largest single-day withdrawal at $733.43 million. Net assets under management across spot Bitcoin ETFs declined from $104.29 billion on May 15 to $94.17 billion by Friday.

The 10-day outflow streak exceeded a prior record of eight straight days, which occurred earlier and involved $3.2 billion in withdrawals. One market analyst described the prolonged outflows as a “contrarian indicator.”