Yangon Gold Enterpreneur Association (YGEA) is working on innitiating Paper Gold scheme, which allows people to trade gold using the gold certificate issued by the banks.
Under the paper gold system, gold is deposited at the banks as assets, for which the banks issue certificate equivalent to the deposited gold. Then the certificates are used to trade gold instead of physical gold.
“The gold quality will be tested in advance to selling it and deposited at the banks, who will also test the quality again and guarantee the quality. So, there will be 99% gold. In normal market, it will take times for gold buyers if he wants to test the gold quality time. In this scheme, the bank will guarantee the quality of gold and so will the traders. There will also be code number on each gold blocks. This will also reduce the need to carry lump sum of cash around when buying gold,” U Myo Myint, the president of YGEA, told Myanmar Business Today.
This paper gold scheme will initially start with the member of YEGA before rolling out to public, he added. Then, the online trading for the paper gold will be introduced.
This plan aimed to create new space in local gold market and at the moment the association in in talks with Shwe Bank to roll out the plan.
Local gold prices have been volatile following the military coup in February. The gold price, for example, dropped by around K200,000 per tical within hours on September 29, after reaching over MMK2.2 million in the morning before dropping to K2 million in the afternoon. Now, the gold prices arr around K1.84 million per tical.
