Knowing the law, trusting the state: legal literacy and investor confidence in Vietnam’s digital asset market

Thanh-Sang Nguyen and Yen Nhi Le Do

Asian Journal of Economics and Banking, 2026, 1-18

Abstract: PurposeDespite the rapid expansion of cryptocurrencies and other digital assets, Vietnam’s young digital asset market has witnessed a lack of robust regulatory frameworks. This study examines how legal knowledge, trading behavior and prior risk experience shape legal risk exposure and trust in government oversight.Design/methodology/approachStructural equation modeling was carried out on a sample of 224 investors to analyze the relationships between legal knowledge, trading frequency, prior risk experience, legal risk exposure, perceived legal risk and trust in government regulation.FindingsGreater legal knowledge dampens exposure to legal risks while strongly strengthening perceived legal risks. Trust in government regulation is significantly enhanced by both perceived and actual legal risks. High trading frequency increases exposure to legal risk, while prior negative experiences weaken the relationship between risk exposure and trust in government oversight.Practical implicationsThe paper provides practical insights for lawmakers when building Vietnam’s new digital asset regulatory frameworks, emphasizing the need for holistic investor education, transparent regulations and robust consumer protection mechanisms.Originality/valueThe study offers empirical evidence from an emerging digital asset market, highlighting how legal knowledge and risk experiences jointly shape investor trust in government oversight under regulatory uncertainty.

Keywords: Legal knowledge; Trading frequency; Perceived legal risk; Cryptocurrency regulation; Legal risk exposure; Trust in government regulation (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ajebpp:ajeb-12-2025-0192

DOI: 10.1108/AJEB-12-2025-0192

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