Article Vietnam: Ban on Gold as Medium of Exchange

(Apr. 18, 2012) On April 3, 2012, the Prime Minister of the Socialist Republic of Vietnam (SRV) issued Decree No. 24/2012/ND-CP on the management of gold trading. The Decree stipulates that there will be a government monopoly of bullion production and of the import and export of raw materials for gold bar production. As of May 25, the date on which the Decree comes into force, seven activities will be banned, including using gold bars as a medium of payment, processing jewelry gold or trading bullion without a license from Vietnam's central bank, and conducting other gold-related business without the approval of the relevant authority. (Vietnam Government Becomes Sole Bullion Producer; Bans Gold as a Medium of Exchange, INTELLASIA (Apr. 6, 2012); Decree 24/2012/ND-CP on Gold Bar Transaction, SRV Ministry of Justice website (last visited Apr. 12, 2012.)

Other highlights of the Decree are:

  • requirements for local businesses to trade in bullion, including: a minimum charter capital requirement of VND100 billion (about US$4.8 million), at least two years of experience in trading gold, annual tax payment of more than VND500 million (about US$24,000) in the two most recent years, and a gold trade network in at least three provinces or cities directly under central control;

  • requirements for bullion trade licenses for credit institutions: charter capital of at least VND3 trillion, registration to engage in gold trading activities, and a network of branches in at least five provinces or cities directly under central control;

  • the granting of authority to the central bank to intervene in the domestic gold market by, e.g., exporting and importing raw gold material, organizing and managing bullion production under quotas set for a certain period, and trading bullion in the market; and

  • the granting of authority to the central bank to add bullion to the state's foreign exchange reserves. (Vietnam Government Becomes Sole Bullion Producer; Bans Gold as a Medium of Exchange, supra.)

The Decree is reportedly aimed at ensuring the legal ownership of gold by organizations and individuals and helping to reduce “goldization” in the economy by discouraging investors from pouring their money into gold and thereby indirectly providing a boon to the stock market. (Id.; Stocks Rise on Back of Interest Drop Talks, TALKVIETNAM (Apr. 10, 2012).)

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Chicago citation style:

Zeldin, Wendy. Vietnam: Ban on Gold as Medium of Exchange. 2012. Web Page. https://www.loc.gov/item/global-legal-monitor/2012-04-18/vietnam-ban-on-gold-as-medium-of-exchange/.

APA citation style:

Zeldin, W. (2012) Vietnam: Ban on Gold as Medium of Exchange. [Web Page] Retrieved from the Library of Congress, https://www.loc.gov/item/global-legal-monitor/2012-04-18/vietnam-ban-on-gold-as-medium-of-exchange/.

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Zeldin, Wendy. Vietnam: Ban on Gold as Medium of Exchange. 2012. Web Page. Retrieved from the Library of Congress, <www.loc.gov/item/global-legal-monitor/2012-04-18/vietnam-ban-on-gold-as-medium-of-exchange/>.