HANOI(BullionStreet): A year after Vietnam announced SJC as state gold brand, country's country's central bank, the SBV issued a decree declaring all other gold bullion as illegal and not eligible for transactions.

According to the decree only one-tael SJC gold bullion of 99.99 percent purity is eligible for transactions.

The new decree has created a panic among public as they fear market may soon only accept amounts of 1 tael (37.5 grams).

But gold holders say they are afraid of being forced to sell their precious metal at low prices due to their light weights.

Last year SJC was selected as a state gold brand name under the SBV’s bid to better control the market.

Saigon Jewelry Co currently produces as many as seven different types of SJC gold bars, depending on their weights: 1/20 tael, 1/10 tael, 1/5 tael, 1/2 tael, 1 tael, 10 tael, and 1 kilogram. All of them have the same ask and bid prices, according to prices listed by the company.

The central bank intended to make one-tael gold bullion the only eligible product for transaction because it is the most common type of gold bullion on the market, analysts said.

While the central bank claims that all of the new policies applied to the gold market are intended to stabilize gold prices and reduce the gap between domestic and international gold prices, businesses still maintain their concerns.

The central bank has stipulated that any transaction between it and the gold businesses will last two days, a requirement traders say may negatively impact their operation.

The draft guideline also requires that gold businesses establish a trading relationship with the central bank after obtaining the license to trade the precious metal.

Criticizing the move, Vietnam Gold Business Association said gold bullion trading is a transaction between gold traders and members of the public, but the central bank has intervened too much.

There is no national standard for gold in other nations, and the central banks there do not directly trade the precious metal,” Association added.

Vietnam is importing international-standard raw gold material and turning it into SJC gold bullion, which is only valuable domestically. When exported, SJC gold is only seen as raw material.