The government of Thailand has drawn up plans to further tighten oversight of gold trading in order to reduce the risks of money laundering, fraud and other financial crimes, with the measures set to cover online transactions as well as the purchase and sale of physical gold.
According to Bloomberg, the Thai Ministry of Finance is working with the Bank of Thailand on a legislative plan to strengthen supervision of the gold industry and increase transparency in transactions.
The Finance Ministry spokesperson and Director-General of the Fiscal Policy Office, Winit Wisetsuwannaphum, told reporters that the government is taking steps to make oversight of the gold trading sector more effective.
Under the proposed legislation, greater attention will be paid to different segments of the gold market, particularly online gold trading and dealings in physical bullion.
The government’s objective is to prevent the gold business from being used for illegal financial activity and to increase transparency in transactions. According to officials, better supervision of the gold market can help limit the risks of money laundering, fraud and other financial crimes.
Work on the legislation is continuing at the Thai Finance Ministry and the central bank, though according to the report the final details of the new regulations and the date of their enforcement have not yet emerged.
Gold occupies a distinctive position in financial crime enforcement, and the reasoning behind Thailand’s move applies well beyond its borders.
Bullion is high in value relative to weight, is fungible, holds value across jurisdictions, and — critically — can be melted and recast, destroying the link between a bar and its origin. A transaction can be settled in cash, in a shop, with minimal documentation, and the resulting asset can be moved across a border in a suitcase. The Financial Action Task Force has for years classified dealers in precious metals and stones as a designated non-financial business and profession, requiring countries to subject them to customer due diligence and suspicious-transaction reporting.
The online dimension is newer. Digital gold platforms and gold-savings accounts allow customers to buy fractional holdings, trade them and take delivery — sometimes with weaker identity verification than a bank would apply, and sometimes across borders.
Pakistan has one of the largest informal gold markets in the region, centred on Sarafa bazaars in Karachi, Lahore and Peshawar, and gold has long been identified in enforcement literature as a settlement mechanism in hawala and hundi networks — the parallel value-transfer systems that compete with formal remittance channels.
Pakistan’s own compliance framework already designates jewellers and bullion dealers as reporting entities under anti-money-laundering rules, but supervision of the sector is thin relative to the volume of trade, and gold imports and smuggling across the western border have been a recurrent enforcement concern.
Thailand’s approach — legislation drafted jointly by the finance ministry and the central bank, covering both digital platforms and physical dealing — is a useful comparator precisely because it treats the two channels as one market rather than regulating the visible half. Whether it works will depend, as it does everywhere, on inspection capacity rather than statutory text.
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