Account-based gold trading should be given the go-ahead through forming a national gold exchange to be governed by the State Bank or one industry leader, Vietnam Gold Business Association (VGBA) chairman Nguyen Thanh Long tells VIR.
What would you comment on the gold management final draft just aired by the State Bank?
Under the fresh draft version, the trading of gold bars has been eased compared to the previous version. Accordingly, people have the right to both buy and sell gold bars but only at banks and authorised businesses.
Besides, gold trading is not entirely banned but only restricted.
However, some points in the draft are still unclear such as the regulation on chartered capital and taxable revenue in gold trading which is subject to changes in diverse development stages. In my view, such regulation should be set stable and long-term and not to confuse gold trading businesses.
The draft content then needs to be further clarified to seek practical comments from market players before it will be officially enacted.
Did the VGBA have additional proposals to enhance market performances?
The draft final version is yet to mention account-based gold trading or the gold exchange formation, whereas such issues in fact benefited from a lot of comments.
I assume it would be necessary to green-light account-based gold trading and form a gold exchange. Account-based gold trading as well as gold certificate trading is commonplace worldwide. Besides, allowing account-based gold transactions would help balance the bullion market on the back of restricted material gold trading. Reality shows that illegal gold trading floors are still the fact of life and cannot be effectively controlled.
The VGBA wants the State Bank to further weigh up the possibility for account-based gold trading and gold exchange formation.
Jewelry gold regulations are in the final draft and considered unnecessarily strict. Is that the case?
Under the final draft, jewelry gold trading will be managed by a single body, the State Bank. That is good for the business but the problem is that the State Bank would hardly control these trading activities.
In my view, the State Bank should join efforts with the Ministry of Industry and Trade to effectively control the jewelry industry. Jewels are also a kind of goods, and gold businesses want to promote jewel export to bring the country hard currencies. Vietnam has advantages in making jewels, therefore too rigid regulations would restrict the business.