What Vietnam’s Gold Shops Taught Me About Money

News Anchors: Gold hitting an all-time high. The price of gold has soared to a new record. Risen above $5,000 an ounce.
Justin Norman: In most places in the world, when the price of gold goes up, people sell. Here, it's the cue to buy more.
Vietnam is one of the fastest-growing economies in the world. Samsung builds around half its phones here. It's a massive economic success story. Vietnam also has the fourth highest crypto adoption in the world. But this year, the government banned global crypto exchanges. So, what's going on here?
I wanted to know what this gold line and Vietnam's crypto adoption have to do with the country's economic growth story. This gap between the headline numbers and the reality on the ground is what I wanted to explore.
So, I'm here in Ho Chi Minh City to get to the bottom of what's really happening.
Justin Norman: Ho Chi Minh City, but still Saigon for most locals. I love the dynamism and the energy of fast-growing cities in the Global South, and here is no exception. It's the economic engine of one of the fastest-growing countries on earth, a place that lifted 40 million people out of poverty in two decades. From war-torn to a global manufacturing hub inside a single lifetime. The city is home to 10 million people and 8 million motorbikes. Big buildings and small chairs, delicious street food and strong coffee, and genuinely one of the hardest places I have ever tried to cross a street.
My interest in Vietnam started when I hired a freelancer for a project. They asked if they could be paid in stablecoins. So, while I'm here in Vietnam, we met up so I could ask him why. Like, does it feel like it's risky to hold stablecoins, or is it okay for now but you're not sure about the future?
Freelancer: I think it's still in the gray area right now.
Justin Norman: This freelancer wants stablecoins because he can get a better exchange rate through Binance than his bank. Vietnam has a managed exchange rate, and the State Bank of Vietnam deliberately devalues the Dong 3 to 5% per year to support its export-oriented growth. So, in periods of higher dollar demand, dollar assets can sell for a premium on a free market like Binance. And that devaluation, while it's helped the economy grow, is felt on an individual household level.
Freelancer: On paper they can say that it's just three to 5% each year, but in reality, when you go to the shop to buy food or anything, it's much higher than that. And that's a reason why I think people don't want to hold Dong in the bank.
Justin Norman: So everyone, everyone is concerned about devaluation.
Freelancer: Yeah, for sure. And gold is a traditional way, and safe, from generation to generation until now.
Justin Norman: While some of the younger generation is preserving wealth with stablecoins, for the older generation, the store of wealth is gold. Vietnamese households hold 400 to 500 tons of gold, nearly 8% of GDP.
Justin Norman: It's a Tuesday morning in Ho Chi Minh City, and I'm going to go get in line to buy gold. When this gold shop opens, there's already 50 people in line ahead of me. It's not a place that you can just bring a camera into.
Justin Norman: Hey Meta, start recording. 
The buy and sell rates are listed around the store, but I have a feeling the customers already know the price. Some people are buying gold bars like this, but many are buying smaller amounts, like this ring. Most are paying in cash. And then, so now it's about 165 million, which is still $1,000 more than the global price. Waiting in line, it becomes clear that this is about much more than just the price of gold. 
To understand why Vietnamese people line up to buy gold, you have to go back to 1975. Fifty-one years ago, a tank drove through this fence at the presidential palace. It was the fall of Saigon, the end of the Vietnam War, and the reunification of North and South Vietnam.
But the 80s were challenging economically. The communist government featured price controls, central planning, and poor monetary policy. The country issued new currencies three times in 10 years, and the last, in 1985, when 10 old Dong became one new Dong, led to inflation rates of over 700%. It's a lasting memory for an older generation who still saves in gold today. But then, in 1986, came Doi Moi economic reforms to build what the government calls a socialist-oriented market economy. While not a pure free market, its reforms enabled more private enterprises and loosened controls on foreign trade. And it changed everything. Foreign investment poured in. GDP growth averaged 7% for the next three decades. And it became one of the greatest development success stories of the past 40 years.
Samsung manufactures nearly half of its global output here. Vietnam runs a trade surplus of nearly $200 billion with the US. Today, much of Vietnam's manufacturing growth is built on top of a currency that its people don't really trust. Currently, the Dong still depreciates 3 to 5% every year by design. It's the price of the growth model. The State Bank of Vietnam deliberately keeps the Dong weaker to keep manufacturing cheap and exports competitive. Vietnam's $24 billion trade surplus looks great on the surface, but the reality is a little more complex. Vietnam imports components from China, assembles them, and ships the finished goods. So, Vietnam also runs a massive $82 billion trade deficit with China. And despite an overall trade surplus, their foreign exchange reserves cover only 3 months of imports. And they're in a battle for foreign investment with the likes of India, Indonesia, Thailand, and Mexico. 
So, it's this context that's driving the government's decisions, and also how Vietnamese people are feeling about the economy on the ground. I'm in Vietnam at an interesting time, as the government breaks ground on a massive $70 billion high-speed rail project, an estimated 15 to 17% of the nation's GDP, and simultaneously implements a series of new regulations and monetary policies as the country seeks foreign investment to fund its ambitious growth plans. Here in Vietnam, as its export economy grows, so too does its role on the global stage. Its manufacturing capabilities have grown in complexity, attracting the likes of Samsung and Intel, who have invested billions of dollars into the country. The country is in a battle for foreign investment, and the Vietnamese government is going all-in with big ambitions to vault the country into high-income status. Without question, Vietnam is one of the world's greatest economic success stories. Yet, when you peel back the layers, more complexity emerges. 
Meanwhile, as Vietnam grows its manufacturing sector, from the young people in big cities, I kept hearing this term: MMO.
Khoa Do: MMO is a definition for making money online. There's a lot of young people like me who MMO, including Bitcoin and, uh, crypto trading.
Justin Norman: Khoa works for a blockchain company, AlphaTrue, whose consumer wallet, Basil Pay, is the first licensed wallet in Vietnam's sandbox.
Khoa Do: Vietnam's economy is growing very fast. Many young people like me face a lot of financial pressure and want to achieve financial freedom, or at least buying a house, owning a house or a car.
Justin Norman: And can you explain to me what is driving big volumes for crypto in Vietnam, right? The stat is 200 billion in volume, right?
Khoa Do: Yeah. But from my perspective, the volume is drawn mostly from trading, especially leverage trading, margin, and futures, more than just normal spot trading.
Vietnamese people have a gambling blood. Vietnamese traders also, we use a lot of trading bots. So that's why the volume is very high, although the capital isn't huge.
Justin Norman: Why did people come to the crypto space in the first place? Was it just because they wanted to make money online and they don't really care whether they're in the gray market or not? Or, you know, do a lot of people actually want to be outside of the system?
Khoa Do: I don't think that people choose crypto because, uh, it's in the gray zone.
I think their first motivation is much more basic. They want something with higher return and easier access than what the traditional system gave them. A lot of Vietnamese people don't really trust the Vietnam Dong because of its high inflation. So they want to hold other assets like USDC and gold, and crypto is just a new version of it. 
Justin Norman: The government ultimately wants to take back control of this space. They want to protect consumers, but also shift use cases from speculation to a bank-led digital money system, to go from volumes driven by trading to volumes driven by infrastructure.
Vietnam has built an international finance center in Da Nang designed to attract global capital, fintech firms, and digital asset developers. And the VIFC's own priority list includes stablecoin research and decentralized finance infrastructure. They're courting global investors along with blockchain companies such as the Stellar Development Foundation and Kraken.
Khoa Do: The government wants to restrict crypto and make it a closed environment. It will have better protection for users, but they're very open to blockchain technology.
Justin Norman: And Vietnam's crypto exchange licensing regime is a clear indication of their priorities. To be issued a license, exchanges will need to put up a staggering 10 trillion Vietnamese Dong, or a little less than $400 million. At least 65% must be contributed by institutional investors such as banks and insurance companies, and there is a cap on foreign ownership. Of the five Vietnamese companies that have passed the initial screening, three are major commercial banks, one is a dominant stock brokerage, and the last is a massive real estate conglomerate. 
But this isn't the first time Vietnam has tried to regulate its parallel economy. As gold demand grew, a 2012 decree gave a single state-owned company the exclusive right to produce gold bars and blocked all new import licenses. For 13 years, supply was capped, yet demand remained deep and structural. So, the price of gold spiked in Vietnam, selling for as much as 30% more than the global gold market. Last year, the government finally abolished the monopoly. But on the day the announcement was made, gold prices hit an all-time high. So today, this gold ring sells for a 15 to 20% premium in Vietnam compared to the global market, underscoring that Vietnam's demand for gold, especially when prices go up, is as much cultural as it is economic. So, the question ultimately is whether this new licensing will enable Vietnam to achieve its goals.
Justin Norman: So, based on the regulation that's being passed, is the expectation that the volumes that are mostly trading, futures, and margin trading today are going to start to move to stablecoin-based payments? Do you think that the use cases for crypto and for blockchain are going to shift in Vietnam?
Khoa Do: Yes, probably. From my opinion, regulation doesn't actually kill crypto in Vietnam. Even though there may probably be a downside in volume and interest, I think there will be a bit of a shift from the informal way into a more transparent environment, where the licensed products and the sandbox, in the long term, I think are still quite positive, because the more serious projects will operate in a more clear legal framework.
Justin Norman: A lot of other countries are seeing considerable growth in stablecoin volumes, either as a hedge against devaluation or, more recently, for cross-border trade. I think Vietnam is just entering that phase. But they want stablecoin adoption, especially for cross-border payments, to be on their own terms. Manufacturing is too important of an industry, and the country has always had to keep strict control of its monetary policy to support its export-oriented growth. And it's a reflection of what's happening in the crypto space in general, moving more towards centralization and enterprise use cases. I came to Vietnam wondering if existing crypto users will join the new regulated path. I realized it was the wrong question. Volumes are going to grow from new use cases altogether. But there's still this tension between the government's priorities for the economy as a whole and its impact on everyday people on the ground.