Peru's state run bank, Banco de la Nacion, is considering buying "informal" gold from illegal alluvial gold miners in hopes that the miners would register with the government and adhere to existing regulations.
The illegal mining has destroyed large areas of the Amazon rain forest and has put many indigenous communities at risk of mercury poisoning.
The 'wildcatters' dump over 70 t of mercury every year into Peruvian rivers and forests, according to environmental organization Mercury Watch.
"We are now evaluating the appropriateness of having Banco de la Nacion make purchases…it is being studied, but has not been discussed at the cabinet level yet," said Peru's Environment Minister, Manuel Pulvar-Vidal.
"It's a problem that the president has asked us to evaluate..it's all part of the government's health strategy and its effort to reduce unregulated mining."