Central bank proposed to issue gold certificates

Many countries allow capital raising through gold certificates issued by the central banks, and the trading of gold certificates must follow strict rules.

Huỳnh Trung Khánh, vice president of the Vietnam Gold Trading Association and an advisor to the World Gold Council in Việt Nam, said that issuing gold certificates is common in some countries. Instead of holding gold, people can keep gold certificates issued by the central bank that can trade on the exchanges.

According to Khánh, the association has also discussed the measure with the State Bank of Việt Nam (SBV) for a long time, but it is a long-term issue that must be done methodically and carefully.

When there is direction from the SBV, the World Gold Council as well as the Vietnam Gold Trading Association will be ready to cooperate with the SBV and competent authorities to explore neighbouring markets such as Singapore and China which have gold certificates and gold exchanges, to research and find suitable measures to apply in Việt Nam.

The issuance of gold certificates will help reduce dependence on gold as people or investors will have a place to deposit gold and the Government can put the gold into circulation to serve economic development.

Customers buy gold at a shop in Hà Nội. The issuance of gold certificates will help mobilise hundreds of tonnes of gold held by the people to serve economic development purposes. — VNA/VNS Photo

Currently, people buy gold just for storage, therefore Khánh believes if the State stores the gold for them with interest rates, which do not need to be too high, people will be willing to deposit it.

In addition to gold certificates, Khánh also commented that for safe and sustainable market development, the first principle is that the SBV needs to control and not let it develop spontaneously.

If a gold exchange is established, the SBV, the Ministry of Finance or the State Securities Commission will be able to control the buying and selling of gold. Besides, the measure can help better balance domestic gold supply and demand.

Echoing Khánh, financial expert Nguyễn Trí Hiếu said the issuance of gold certificates would help mobilise hundreds of tonnes of gold held by the people, to serve economic development purposes.

The SBV should issue gold certificates to people so they can deposit gold, Hiếu said, adding that these certificates must have interest, the same as savings.

A number of people are supporting this proposal.

Vũ Xuân Thành told vietnamnet.vn that sending gold to the State for certification was an action that contributed to stabilising the country's economy, helping the State become more economically autonomous.

Another man who is asked not to be named, said he also wanted to do the same, describing it as a responsibility to the Fatherland.

However, a policy that allowed people to deposit gold like a savings account would be needed. Currently, people have to pay a fee for depositing gold, which would not encourage them to do so.

Some others opposed the proposal, saying that gold certificates were not feasible.

Pham Anh Tuấn who lives in Hà Nội said gold or money should be kept in the safe or in the bank so that their owners could feel secure.

He said people should not send gold to the State without receiving any interest rates.

No one would be willing to use real gold to exchange for a few pieces of paper, Quốc Chiến told vietnamnet.vn.