Calls for central bank to issue gold certificates
Hanoi: The government should issue gold certificates that earn interest like cash deposits to attract 400 tonnes of gold from the public, experts suggest.
Other countries allow capital raising through gold certificates issued by the central banks, and the trading of gold certificates must follow strict rules, they said.
Huynh Trung Khanh, vice-president of the Vietnam Gold Trading Association and an adviser to the World Gold Council in Vietnam, 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 be traded on exchanges.
According to Khanh, the association has also discussed the measure with the State Bank of Vietnam (SBV) for a long time, but it is a long-term issue that must be implemented 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 Vietnam, he added.
The issuance of gold certificates would help reduce dependence on physical gold as people or investors will have a place to deposit gold and the government can put the gold into circulation to better serve economic development in the country.
Currently, people buy gold just for storage, therefore Khanh believes if the government stores the gold for them with interest, which does not need to be too high, people will be willing to deposit it.