Absorbing 400 tons of gold from the people with gold certificates, paying interest like saving money

In the recent discussion “Solutions for safe and sustainable gold market development”, it was said that many countries allow capital mobilization through gold certificates issued by the State - State Bank (SBV) to ensure safety. The buying and selling of gold certificates must follow strict rules.

Is this a solution to develop a safe and sustainable gold market; as well as limit the practice of people buying gold and keeping it in their safes?

Mr. Huynh Trung Khanh, Vice President of the Vietnam Gold Business Association and advisor to the World Gold Council in Vietnam, said that issuing gold certificates has become popular in some countries.

Instead of keeping physical gold, gold certificates will help people just keep that "paper gold" and can exchange it on the exchange.

According to Mr. Khanh, the Gold Business Association has discussed this with the State Bank for a long time, but it must be done systematically, researched and this is a long-term issue.

“In the immediate future, we must address the current physical gold issue, as well as the Prime Minister's telegram on the difference between domestic and international gold prices; raw materials for jewelry making... We need to do it in order. If a new decree on gold market management is issued, all of these issues also need to be mentioned and implemented in stages," Mr. Khanh noted.

This person said that when there is a policy, the World Gold Council as well as the Vietnam Gold Business Association are ready to cooperate with the State Bank and relevant agencies to study neighboring markets such as Singapore, China... places with gold certificates and operating gold trading floors to research and from there have their own way of doing things.

The Vice President of the Vietnam Gold Business Association also expressed that when there is a gold certificate, there will be less dependence on physical gold, people or investors will have a place to deposit gold for use in buying, selling and trading. Meanwhile, the amount of gold that people have stored can be put into the economy for circulation.

“Recognizing the right to own gold but not creating conditions for gold to be circulated, each investor and each citizen will only know how to buy physical gold for storage. If creating conditions for them to store it, and also benefiting the economy, then people or investors will be willing, the interest rate does not need to be too high,” Mr. Khanh added.

In addition to the gold certification certificate, the expert also suggested that for the market to develop safely and sustainably, the first principle is that the State Bank needs to control and not let it happen spontaneously.

The issue of establishing a gold trading floor has also been discussed a lot. If established, the State Bank, the Ministry of Finance or the State Securities Commission will control the buying and selling of gold; even balance domestic supply and demand, when demand is too great and supply is not enough, it will be necessary to import.

“Gold trading floors and gold certificates will bring gold into the economy. But currently, gold is still “dead” in one place with a quantity of up to several hundred tons,” Mr. Khanh emphasized.

Supporting the solution of issuing gold certificates, economic expert - Dr. Nguyen Tri Hieu assessed that this solution will help mobilize hundreds of tons of gold currently held by the people for use in economic development purposes.

However, he noted: “Who issues the gold certificates? It can only be the State Bank, this agency will also mobilize that amount of gold, issue gold certificates to people so they can deposit gold. This certificate of the State Bank must have interest, like a type of savings.”

According to Mr. Hieu, it is possible to consider a gold trust fund at this time, but it is not the time to implement it. In the immediate future, there needs to be a gold trading floor so that all components can update and have smooth information.

Regarding the issue of gold import, Mr. Hieu re-emphasized the previous proposal that the State Bank should assign gold import to reputable companies with financial capacity. At the same time, withdraw the national gold brand SJC to create a competitive market for all gold brands, gradually the market will develop stably.