Gold certificates would be issued by the State Bank of Vietnam (SBV). Instead of hoarding physical gold, with these certificates, people just need to keep ‘paper gold’, and the valuable papers can be exchanged on trading floors.

The idea was raised at a recent workshop discussing solutions for a sustainable gold market. Experts said gold certificates are used in many countries under strict regulations. 

Huynh Trung Khanh, deputy chair of the Vietnam Gold Business Council (VGBC) and advisor of the World Gold Council (WGC) in Vietnam, noted that gold deposit certificates are common in some countries.

VGBC has been discussing this with SBV but it is necessary to prepare well and solve problems step by step.

“In the immediate time, we need to handle the problem of physical gold and implement the PM’s instructions to eliminate the gap between Vietnam and world prices, as well as the problem about materials for jewelry manipulation. The problems need to be solved in a priority order,” he said.

“If the government issues a new decree on gold market management, the legal document needs to mention the problems and they need to be deployed in different stages,” he added. 

He said that VGBC and WGC are ready to join forces with SBV and agencies to learn experiences from neighboring markets such as Singapore and China, which have gold certificates and gold trading floors.

He believes that when gold certificates are issued, Vietnam will rely less on physical gold, and people and investors can deposit gold and conduct trading transactions. And the gold hoarded by people can be brought into the economy.

At present, people’s right to own gold is recognized, but the state has not created favorable conditions to bring gold into circulation as capital. Therefore, people only buy and hoard gold under their pillow.

“If people see benefits from depositing gold, they will be ready to lend gold, thus providing more capital to the economy, with no need to pay overly high interest rates for gold deposits,” Khanh commented.

Manh Ha