The State Bank of Vietnam will continue to allow gold trading but ban the use of the precious metal as a means of payment, according to a draft decree expected to be submitted to the government later this month.

Officials had reportedly considered limiting the gold bullion trade to one-way sales to the central bank. The latest version of the draft decree, however, allows people to buy and sell gold at banks and authorized retailers.

While gold holdings are allowed under the draft decree, the use of gold as currency is completely banned.

The central bank plans to tighten control over the gold market, requiring existing bullion traders to apply for new business licenses. Traders must meet certain requirements of capital, revenue and number of sales outlets.

Tuoi Tre newspaper on Tuesday cited a gold trader as saying that many gold shops in Vietnam will have to scale down their business to trading in jewelry and exclude other activities.

There were also some suggestions that gold bullion production should be banned, but the central bank’s draft decree has ruled out this proposal.

According to the VnExpress news website, there are nearly 10,000 gold retail outlets in Vietnam, selling small gold bars of eight different brands. 

Le Xuan Nghia, deputy head of the National Financial Supervisory Committee, said on June 9 that Vietnam’s total gold holdings could range from 20 to 45 percent of the country’s GDP. Most of the holdings are maintained by private individuals while official reserves with the central bank are insignificant, he said.