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Vietnam Gold Business Association (VGTA) has urged the Prime Minister to promptly issue policy guidelines to regulate the gold jewelry and crafts sector. The association specifically proposes allowing enterprises to borrow gold from the public at negotiable interest rates, citing alignment with civil law. The proposal has prompted a range of views from industry and experts.
VGTA said it is necessary to clearly define participants in gold trading, including individuals buying and selling gold not for business purposes, household traders, and individuals engaged in gold trading as a business. The association argued that defining these groups would create a consistent basis for applying invoicing, tax, and settlement rules, helping to unlock gold supply in the economy.
According to VGTA, there is currently no specific legal document from the Government or relevant authorities guiding the purchase or mobilization of domestic gold for use as input material in jewelry and craft production. The lack of a legal framework, the association said, creates legal risks for gold purchasing or mobilization in various forms, including buying and lending. VGTA noted that some enterprises have faced administrative penalties and, in certain cases, have been referred to authorities for clarification of their gold purchase and mobilization activities.
VGTA therefore called for the Government to issue clear regulations and guidelines on mechanisms for mobilizing and purchasing domestic gold as input material for production and jewelry crafting.
VGTA also said many jewelry companies are short of raw materials to produce gold jewelry. Some private gold holders expressed concern about the proposal, while others said it could be feasible if designed with strict controls.
Nguyen Ngoc Trong, Director of NPJ New Partner Gold, said that if technical implementation is set aside, enterprises could benefit from using gold mobilized from the public. He added that such a solution could reduce gold imports and ease exchange-rate pressure, while gold holders could profit from their stored assets and enterprises could obtain raw materials with a clear origin.
However, he said expanding this approach into a broadly adopted mechanism would require clear regulations and guidance. While firms can already obtain gold from individuals through civil contracts, scaling it up would be more complex without a detailed regulatory framework.
Economist Dr. Le Ba Chi Nhan expressed cautious views and said he even opposes allowing enterprises to borrow gold from the public at negotiable rates. He pointed to Vietnam’s past experience with a “goldized” phase, when the banking system mobilized and lent gold, enterprises borrowed gold for business, and the public used gold as a parallel payment instrument to the dong. He said this weakened monetary policy, put pressure on the exchange rate, and exposed the banking system to risks including maturity mismatch and gold price volatility.
Nhan said Decree 24/2012 was issued to end goldization and remove gold from credit channels. Allowing enterprises to borrow gold directly from people at negotiated rates today, he argued, would effectively reopen a gold-based credit channel in another form.
He cited at least three macroeconomic risks:
Other experts said the core issue is not simply creating conditions for enterprises to borrow gold from the public, but ensuring that any gold resource is safely converted into economic strength through the formal financial system under the supervision of the State Bank of Vietnam.
Gold expert Tran Duy Phuong said that mobilizing public gold to supply jewelry production is theoretically reasonable but faces many practical hurdles. He noted that gold in private hands exists in different forms such as bars, rings, and jewelry. If mobilized to be remelted and used as input material, repayment becomes highly complex because it is unclear in what form people would receive compensation.
He also said verifying gold quality is not straightforward. Except for branded bars, most rings and jewelry do not conform to uniform standards. Mobilization would require verification and remelting to determine gold content, which would add costs and time. There is also no clear answer on which types of gold would be mobilized or whether all types would be accepted.
Phuong further warned that once gold is used in production, the original asset would not remain intact because it would be melted and transformed, creating balance-sheet risk. When people redeem gold, enterprises must have gold to repay, while gold prices can swing sharply. He gave an example: mobilized gold at 170 million dong per tael could rise to 200 million dong per tael at maturity, making repayment difficult.
Phuong said private gold lending differs from bank deposits in several key ways: it has no insurance, no established supervisory framework, and no standardized risk-management practices. If a borrower defaults, lenders would bear the losses. In addition, gold price volatility could trigger disputes over conversion rates, settlement timing, interest rates, or gold quality, potentially increasing pressure on the court system.
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