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A proposal to allow enterprises to borrow gold from the public—if not tightly controlled—could create multiple macroeconomic and financial risks, according to industry representatives and experts in Vietnam.
The Vietnam Gold Business Association (VGTA) has asked the Prime Minister to promptly issue policies governing the trade in gold jewelry and ornaments. Among its recommendations is a mechanism that would let enterprises borrow gold from the public at negotiated interest rates, citing alignment with civil law.
VGTA said the policy would require clear identification of gold-trading participants, including individuals trading gold without business purposes, household businesses, and individuals trading gold commercially. The association argued that such classification would be the basis for applying invoices, taxes and payments, helping to “unlock” gold stocks held in the economy.
VGTA noted that there is currently no specific legal document from the Government or relevant authorities guiding the purchase or mobilization of domestically sourced gold to be used as production inputs or for jewelry making. Without a legal framework, activities to buy or mobilize gold in different forms (including borrowing) are said to carry legal risks.
The association pointed out that, in recent times, many enterprises have faced administrative sanctions or have been referred to authorities to clarify their gold trading activities. “The government needs to issue regulations, and specific guidance on the mechanism and methods of mobilizing and purchasing gold from the public as input material for production and jewelry making,” VGTA urged.
While some people holding gold are concerned, some enterprises believe the plan could be feasible if designed with strict controls.
Nguyen Ngoc Trong, Director of NPJ Partners Gold Company, said that if implementation issues are set aside, the concept of enterprises tapping public gold for production could be positive. He argued it could help reduce gold imports, easing pressure on the exchange rate, and allow citizens holding gold to monetize stored assets while enterprises obtain raw materials with clear origin.
However, he emphasized that practical rollout is not simple. He noted that enterprises can already borrow gold from the public through civil contracts, but expanding this into a widely used mechanism requires clear regulations and guidance.
Experts warned that the proposal could reopen channels that were previously closed. They cited past experience in which commercial banks mobilized and lent gold, enterprises borrowed gold for business, and some people treated gold as a parallel payment method to the dong. According to the commentary, this weakened monetary policy, put pressure on the exchange rate, and exposed banks to maturity mismatch and gold price volatility.
Decree 24/2012 was then issued to end the “goldization” trend and remove gold from credit channels. Nhân added that allowing enterprises to borrow gold directly from the public at negotiated interest rates would effectively reopen a gold credit channel in another form.
Experts suggested the core issue is not simply creating conditions for enterprises to borrow gold from citizens, but transforming gold into a safe resource for the economy through the formal financial system under State Bank oversight.
Gold expert Tran Duy Phuong said the idea is theoretically reasonable for mobilizing gold held by the public as jewelry inputs, but practical obstacles are significant. Gold exists in multiple forms—bars, rings and jewelry. If mobilized for remelting into raw material before crafting products, repayment becomes complicated.
He asked what form the public would receive back if they contributed bullion, rings or jewelry. He also noted that assessing gold quality is not straightforward: except for branded bars, most rings and jewelry do not have uniform standards. Enterprises would need to test and remelt to determine gold content, which would require substantial costs and time. There is also no clear answer on which types of gold would be accepted.
More importantly, once gold is used in production, the original asset is melted into new products, creating balance-sheet risk. “When the public withdraws gold, enterprises must have gold to repay, while gold prices can swing. For example, if a mobilized gold price is 170 million dong per tael and the price rises to 200 million per tael at maturity, balancing the repayment becomes very difficult,” Phuong explained.
He added that this approach differs from bank deposits because civil gold loans lack insurance, supervision and standardized risk management. If a borrower defaults, lenders would bear most losses. Price volatility could also trigger disputes over valuation, repayment timing, interest rates or gold quality, potentially straining the court system.
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