Gold Exchange: Considering 3 options; piloting in 3 phases

(Chinhphu.vn) - The research to establish a national gold trading floor is considered an important step to strictly manage and make the gold market transparent, while creating a foundation to mobilize social resources, promote growth and stabilize the macro economy in the new period.

Deputy Governor of the State Bank of Vietnam Pham Tien Dung - Photo: VGP

On the afternoon of October 15, the State Bank of Vietnam (SBV) held a seminar on establishing a gold trading floor in Vietnam.

In his opening speech, Deputy Governor of the State Bank of Vietnam Pham Tien Dung said that the Vietnamese gold market has gone through many different stages of development. The research and consideration of establishing a gold trading floor is a synchronous step to perfect the institution, make trading activities transparent, limit uncontrolled free trading, and strengthen the State's management role. In addition, the establishment of a gold trading floor also helps provide transparent data for analysis, forecasting, and policy making.

Roadmap towards a national gold exchange

At the seminar, Mr. Dao Xuan Tuan, Director of the Foreign Exchange Management Department (SBV), said that the establishment of a gold trading floor based on the principle of State management is suitable for practice. The initial goal is to form a physical gold trading floor, a distribution channel for imported raw gold that meets standards, is public and transparent; gradually deploy gold account and derivative products, aiming to mobilize gold resources from the people to convert into investment resources.

According to Mr. Tuan, Vietnam has many advantages: Decree 232 allows the State Bank to grant gold import licenses to qualified banks and enterprises; financial sandbox models, international financial centers, commodity exchanges, and digital assets have been formed; many banks have experience operating trading floors. Vietnam can refer to international gold floor models such as SGE (China), IIBX (India), SBMA (Singapore)...

Mr. Dao Xuan Tuan, Director of the Foreign Exchange Management Department (SBV) - Photo: VGP

However, the major difficulty is that gold is a special, high-value commodity that requires a system of storage, inspection, and asset safety assurance. Currently, Vietnam does not have a centralized gold storage and inspection center. Therefore, the implementation needs a suitable roadmap, step by step, cautiously, ensuring the safety of the financial system and macroeconomic stability.

Mr. Dao Xuan Tuan said that the State Bank is considering three model options:

First, establish a National Gold Exchange. Second, allow gold to be traded on the Commodity Exchange. Third, establish a Gold Exchange in the International Financial Center in Vietnam.

All are aimed at creating a modern gold trading center with synchronous payment, storage and technology infrastructure, effectively mobilizing gold resources from the people.

The pilot is expected to be divided into 3 phases, flexibly adjusted according to actual implementation. The first phase is not yet connected with the international gold exchange to ensure risk control.

Many opinions at the seminar agreed that the establishment and operation of a centralized gold trading floor is a strategic step in macro management, helping to stabilize the market, strengthen confidence and promote gold sources for production and business, instead of hoarding.

Mr. Bui Hoang Hai, Vice Chairman of the State Securities Commission ( Ministry of Finance ) - Photo: VGP/HT

Mr. Bui Hoang Hai, Vice Chairman of the State Securities Commission (Ministry of Finance), said that the Vietnamese gold market proposed two products that could be deployed soon. These are gold derivatives, which help businesses hedge against price fluctuations and meet legitimate speculative needs; and gold exchange-traded fund (ETF) certificates, which serve people's need for safe storage.

According to Mr. Hai, the current legal framework for gold derivatives allows immediate implementation because Vietnam already has a stable derivatives market with transparent payment and deposit mechanisms. However, it is necessary to clearly define the reference base price, which can be taken from the national gold exchange or reputable exchanges such as LME or COMEX...

Gold ETFs need a physical gold trading floor as a foundation, but can still be implemented through negotiated transactions between investment funds if the State Bank allows it. "The establishment of a national gold exchange similar to the Stock Exchange will create a solid legal and technical foundation, helping the market operate synchronously and safely," Mr. Hai suggested.

The representative of the State Securities Commission said that gold custody and testing activities are crucial factors. Products traded on the floor need to be standardized, only gold types that meet standards such as 99.99% or 24K should be listed to concentrate liquidity, facilitate payment and develop derivative products in the future.

Concluding the discussion, Deputy Governor Pham Tien Dung affirmed that the State Bank had clarified the issues raised by the delegates, emphasizing that the State Bank would not directly build or operate the gold exchange; in reality, this would be carried out jointly by state-owned and private enterprises under the management of competent authorities.

Deputy Governor Pham Tien Dung said that the implementation process needs to be cautious and step by step, because this is a policy that has a big impact on the macro economy. Before operating, it is necessary to carefully evaluate the model, the scope of traded goods, the operating mechanism, and information processing.

In the immediate future, the gold exchange will focus on making the import and trading of gold bars transparent. Products such as derivatives and gold certificates will continue to be studied in coordination with the Ministry of Finance and the Securities Commission in the next phase.

The Deputy Governor also emphasized that the inspection and custody stages are important foundations that need time to complete. The SBV leader noted that there are many viewpoints that can be implemented, but it is necessary to determine the macro and highest goals of establishing a gold trading floor. In the first phase, the floor will only trade gold that meets international standards, in parallel with standardizing domestic inspection procedures.

The State Bank will draft legal regulations and seek opinions from ministries and branches before submitting them to the Prime Minister.

"Units coordinate and give urgent comments to complete the task within 10 days as directed by the Government," the Deputy Governor requested.

Huy Thang

Source: https://baochinhphu.vn/san-giao-dich-vang-dang-xem-xet-3-phuong-an-thi-diem-theo-3-giai-doan-102251015213414796.htm