Gold issue continues to burn on

The central bank just founded a team taking charge of drafting a plan on usage of local resources to stabilise the local bullion market. What way is most effective in your view to take gold from the community?

Gold reserves in the community are huge at around 500 tonnes. We would have $10 billion at our disposal if we succeeded in mobilising just half of that amount. In my view, the best way to raise gold from the public is through issuing gold certificates. Each certificate is tantamount to a certain gold volume which will be kept by the people while physical gold kept by the state.

People will procure the right to use these gold certificates for mortgage or market transaction purposes. They can also take back gold whenever they want. For its part, the state will use that gold volume to enhance firms’ performance. When necessary, the state will intervene into the market with that gold.

In doing that, material gold will not sit idle but it could be circulated in the economy to boost usage efficiency. However, to make this come true the following factors must be met - with clear and transparent policies, effective gold mobilising services and systems and regular check and inspection network.

Will such gold certificates be subject to interest and who will distribute such certificates?

The State Bank shall issue these gold certificates alongside enacting relevant regulations on usage of these certificates. Gold certificates should be divided into two types – named or unnamed certificates in which named certificates subject to enjoy certain interest rates while unnamed certificates are interest free. People can deposit bearer certificates at banks to benefit from interest, while they can use unnamed certificates for market transactions.

People generally have a psychology that it would not be easy for them to take back gold. How to remove that psychological barrier?

That is true. As I stated above, policies must be clear and transparent. A concrete development trajectory must be in place also to ensure security for people’s assets. If these can be achieved, people will have an easy mindset when the state keeps their gold.

Should Vietnam hike gold-based foreign obligatory reserves and stop gold bar trading in the market?

I support those ideas. Hiking gold reserves would be a wise move. How can the central bank intervene into the market to keep price stable when its gold stock is flat? Of course, this gold stock should not be laid idle but should ensure usage efficiency.

Gold bar trading should be banned in the long term. In the short term we can distribute gold certificates to replace gold bar trading to ensure healthy and secured gold transactions while the state has gold in stock.