Vietnam Ends State Monopoly on Gold Trading: A New Era for the Gold Market

Vietnam’s Gold Market Revolution: State Monopoly Ends, Competition Begins

Vietnam, Asia’s third-largest gold importer, has taken a historic step by ending its 13-year-old state monopoly on gold trading and bullion production. This sweeping reform, enacted through Decree 232/2025/ND-CP, marks a pivotal shift in the country’s financial landscape, opening the door to competition, transparency, and global integration. The move comes amid a surge in gold demand, a weakening Vietnamese dong, and growing pressure to align with international market standards. As the dust settles, the implications for consumers, investors, and the broader economy are profound.

Why Did Vietnam End Its Gold Monopoly?

For over a decade, the State Bank of Vietnam (SBV) and the Saigon Jewelry Company (SJC) held exclusive rights to produce and trade gold bars. This monopoly, established in 2012, was intended to stabilize the market and curb speculation. However, it led to unintended consequences:

• Price Distortions: Domestic gold prices consistently traded at a steep premium—sometimes over 30%—compared to global benchmarks.
• Black Market Activity: The price gap fueled smuggling and unofficial trading, undermining state control.
• Limited Consumer Choice: SJC became the sole trusted brand, stifling competition and innovation.

By 2024, Vietnam imported 55 tonnes of gold, dwarfed by China’s 857 tonnes and India’s 803 tonnes, but the local market’s inefficiencies were glaring. The Vietnamese dong’s depreciation and rising inflation further intensified demand for gold as a safe-haven asset, especially during cultural festivals and weddings, where gold is a traditional store of wealth.

Government’s Rationale

Prime Minister Pham Minh Chinh and financial regulators recognized that the monopoly model was unsustainable. The new decree aims to:

• Normalize the gold market and reduce price premiums
• Increase transparency and oversight
• Align Vietnam’s gold market with international standards
• Support macroeconomic stability by reducing speculative pressures on the dong

What Changes Under the New Decree?

The end of the monopoly is not a free-for-all. Instead, Vietnam is moving to a tightly regulated, competitive market. Key changes include:

• Licensing System: Commercial banks and eligible businesses can now apply for licenses to import raw gold, produce bullion, and trade gold bars. Only those meeting strict capital and technical requirements—such as minimum capital of VND 1 trillion for businesses and VND 50 trillion for banks—will be approved.
• Import Quotas: The SBV retains the authority to set gold import quotas based on macroeconomic conditions, monetary policy, and market trends. This ensures that gold inflows do not destabilize foreign exchange reserves.
• Transparency and Digitization: All gold transactions above VND 20 million (about $760) per person per day must be conducted via bank accounts. Licensed entities must issue electronic invoices and share transaction data with the central bank, reducing cash-based trading and improving traceability.
• Quality and Standardization: Producers must publicly declare gold bar specifications, including weight, purity, and anti-counterfeit features. Each bar will have a unique serial number and standardized packaging, with regular audits by independent testing centers.
• Multiple Brands: The market will no longer be dominated by SJC. New brands from major banks and enterprises are expected to emerge, provided they meet stringent quality and transparency standards.

These reforms are designed to foster competition, protect consumers, and create a more orderly market. As economist Nguyen Quang Huy noted,

“This is a historic milestone for the Vietnamese gold market. The key is not who produces the gold, but whether the product is reliable and transparent.”

Immediate Impact: Price Volatility and Market Reactions

The announcement of the decree triggered a surge in gold prices. At SJC, gold bars reached a record selling price of VND 128 million (about $4,865) per tael, with buyers paying VND 126 million. This spike reflected both pent-up demand and uncertainty as the market adjusted to the new rules.

Experts believe that, in the short term, volatility is likely as investors and consumers recalibrate. Some buyers may delay purchases, anticipating lower premiums, while others may sell to lock in profits. The price gap between domestic and global gold is expected to narrow from around VND 20 million to VND 14–15 million per tael, with a reasonable long-term gap of VND 5–7 million.

Pham Luu Hung, chief economist at SSI Securities Corp., described the move as a “pivotal shift” that will transition Vietnam from a state-controlled model to a regulated, competitive market. He emphasized that increased supply and competition should gradually bring domestic prices closer to international levels.

Investor Perspective: Gold as a Strategic Hedge

Vietnam’s gold market has long been a refuge for investors seeking protection from currency volatility and inflation. Over the past year, the dong depreciated by 4.37%, while gold prices soared by nearly 33% in local currency terms. As a result, gold remains a critical asset for both institutional and retail investors.

With liberalization, new opportunities are emerging:

• Hedging Strategies: Investors can diversify by holding SJC-certified bullion, exploring digital gold exchanges, and pairing gold with USD-denominated assets.
• Financial Innovation: The government is planning to launch a national gold exchange in Ho Chi Minh City by mid-2026, along with gold futures and certificates, to boost liquidity and transparency.
• Risks: Potential rebounds in the dong, regulatory uncertainties, and liquidity constraints in the physical gold market remain concerns.

According to a report by AInvest,

“Vietnam’s gold market liberalization presents a strategic window for investors seeking both protection and growth in a rapidly evolving financial landscape.”

How Will the New System Work?

The new framework introduces a licensing mechanism for gold bar production and trading. Only commercial banks and enterprises with sufficient capital and technical capacity can participate. The SBV will oversee the process, issuing import quotas and monitoring compliance.

Key operational features include:

• Electronic Transactions: All significant gold purchases and sales must be processed through bank accounts, with electronic invoices issued for every transaction.
• Data Integration: Licensed entities must connect their information systems with the SBV, allowing for real-time monitoring and audits.
• Quality Assurance: Gold bars must meet strict standards for purity, weight, and anti-counterfeit measures. Independent testing centers will verify compliance, and each bar will be traceable via serial numbers and digital records.
• Market Oversight: The SBV will conduct regular inspections, enforce compliance, and adjust import quotas as needed to maintain market stability.

This approach balances liberalization with robust oversight, aiming to prevent the excesses and instability that can accompany rapid deregulation.

Consumer Benefits and Challenges

For Vietnamese consumers, the end of the monopoly promises several advantages:

• Greater Choice: Multiple brands and producers will compete on quality and price, expanding consumer options.
• Lower Premiums: Increased supply and competition should reduce the price gap with global gold, making gold more affordable.
• Transparency and Safety: Electronic transactions and standardized products will protect buyers from fraud and counterfeiting.

However, challenges remain. Many small jewelry businesses lack the capital to obtain import licenses, and the transition to a multi-brand market may take time as consumers adjust to new players. SJC’s brand recognition and trust will likely persist in the short term, but high-quality alternatives could gradually gain market share.

Broader Economic and Cultural Implications

Gold holds a unique place in Vietnamese culture, serving as a traditional store of wealth and a key part of celebrations such as weddings and the Lunar New Year. About 30% of households reportedly hold gold for these purposes. The reforms aim to preserve this cultural role while modernizing the market.

On the economic front, the government hopes that a more efficient gold market will:

• Reduce speculative pressures on the dong
• Enhance financial system stability
• Support domestic manufacturing by lowering input costs for jewelry producers

To further support the sector, the Ministry of Finance has proposed reducing export taxes on gold jewelry from 1% to zero, aiming to boost competitiveness and industry growth. However, domestic manufacturers still face challenges from limited raw gold supply and high prices, which have eroded export revenues.

International Context

Vietnam’s reforms bring its gold market closer to international norms, where competition, transparency, and regulatory oversight are standard. By narrowing the price gap with global gold and integrating with international markets, Vietnam positions itself as a more attractive destination for investors and traders.

Bloomberg described the move as a “pivotal shift,” noting that it could boost supply and efficiency while reducing opportunities for smuggling and unofficial trading.

Regulatory Safeguards and the Path Forward

Despite liberalization, the SBV will maintain strict oversight to ensure market stability. Key safeguards include:

• Import Quotas: To prevent excessive gold inflows that could destabilize the currency or foreign reserves.
• Standardization: Regulations on weight, purity, design, and anti-counterfeit features for all gold bars.
• Traceability: Digital records and serial numbers for every bar, with regular audits by independent centers.
• Market Surveillance: Real-time data integration and inspections to detect and prevent fraud or manipulation.

Economist Nguyen Huu Huan emphasized the importance of these measures, stating,

“For the market to operate safely and sustainably, the SBV must implement gold bar standardization and rigorous oversight.”

The government also plans to establish a national gold trading floor, aggregating standardized, high-quality products to further enhance transparency and efficiency.

In Summary

• Vietnam has ended its 13-year state monopoly on gold trading and bullion production, opening the market to licensed banks and businesses.
• The reforms aim to reduce price premiums, increase transparency, and align with international standards while maintaining strict regulatory oversight.
• Immediate effects include price volatility and a narrowing gap between domestic and global gold prices.
• Consumers will benefit from greater choice, lower premiums, and enhanced safety, though SJC’s brand dominance may persist in the short term.
• Gold remains a vital cultural and economic asset in Vietnam, serving as a hedge against currency volatility and inflation.
• The SBV will retain control over import quotas and enforce rigorous quality and transparency standards to ensure market stability.
• Vietnam’s gold market liberalization is expected to boost competition, support economic growth, and attract investors seeking protection and opportunity in a rapidly evolving landscape.