The State Bank of Vietnam (SBV)’s proposal to impose tighter regulation on gold trading may leave jewellers on the verge of bankruptcy.

Proposed policies on gold trading may send goldsmiths into bankruptcy

The SBV is seeking government approval for a proposed decree on gold trading. According to the draft decree, gold producers and traders must own five certificates for business registration, gold production, gold jewellery and fine art processing and trading, and gold jewellery and gold material imports.

However, Chairman of HCM City Association of Fine Arts, Gold Jewellery and Gemstones Nguyen Van Dung, said the proposed policies are unfair as they may decimate traditional goldsmithing.

According to Dung, only gold bars and gold materials have a negative impact on monetary policies as they are easily converted into hard currency. Gold jewellery and fine arts are not used as means of payment.

He noted that it would be impossible to issue certificates on gold jewellery production and trading as almost all gold jewellery enterprises are household businesses that have only five to ten goldsmiths. They are extremely unlikely to satisfy all the requirements and may go bankrupt.

Ho Chi Minh City is currently home to thousands of goldsmithing household businesses, none of which have business registration certification, and only possess a gold jewellery processing certificate. They would struggle to meet the new criteria.

The expected requirement for gold jewellery exports are also infeasible as it requires traders to obtain SBV approval for the export of fine arts and gold jewellery with a minimum content of 20 K or 83.3% gold. Most major markets prefer 95% gold content and higher, he added.