Give tech startups a sandbox: Without room to test, how can anything new emerge?

A Vietnamese startup developing a self-custody wallet has attracted interest from international venture capital funds, but its biggest obstacle is not technology. The product sits at the intersection of Web3, e-commerce and embedded financial services, leaving the team unsure how to obtain permission to test it.

The Ho Chi Minh City company is completing a demonstration version that combines embedded finance, NFT ticketing and an on-chain loyalty program. It aims to improve the customer experience and connect directly with payment services provided by licensed financial institutions. When the startup approached regulators about a trial, it encountered delays because no existing legal provision fully covers the model.

Lê Hoài Việt, a lecturer in entrepreneurship and innovation at Ho Chi Minh City Open University and a member of the southern National Startup Advisory and Support Council, said sandboxes address the mismatch between technology’s rapid growth and the slower pace of lawmaking. “Institutional risk is the most expensive sunk cost,” he said. In his view, it directly weakens founders’ willingness to take risks and reduces companies’ valuations before venture capital funds.

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Institutional risk is the most expensive sunk cost.

Nguyễn Thế Vinh, chairman of the Ho Chi Minh City Blockchain Association’s chapter, identified the liability risk facing approving officials as the main barrier to sandbox applications. Coordination among ministries and lengthy reviews, he said, largely result from that concern. “When the criteria are unclear, approving a new model creates major risks for officials, while refusing approval creates little direct responsibility,” Vinh said. He added that applications can therefore be delayed while authorities seek further opinions.

Việt argued that an economy intolerant of mistakes can trap resources in safe, easily copied businesses and weaken global competitiveness. Controlled failure, he said, can provide policymakers and markets with real-world data for improving regulations. The article presents a sandbox as a way to let businesses test new ideas without allowing uncertainty over responsibility to drain Vietnam’s technology sector.

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When the criteria are unclear, approving a new model creates major risks for officials, while refusing approval creates little direct responsibility.