Singapore will be launching an over-the-counter (OTC) gold clearing system and central bank gold vaulting services this year. The new initiatives were announced by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong during his opening address at the 9th Asia-Pacific Precious Metals Conference (APPMC) on June 15.
“We are not seeking to replace established centres of gold trading and liquidity,” says Gan, who is also the chairman of the Monetary Authority of Singapore (MAS). “Instead, Singapore can serve as a trusted node in the global gold ecosystem.”
Gan’s announcement marks the first update made by Singapore’s Gold Market Development Working Group. The group was established in January and is led by the MAS and the Singapore Bullion Market Association (SBMA).
National Development Minister Chee Hong Tat, who is also deputy chairman of the MAS, told reporters in a media briefing on March 27 that the working group will develop measures that will better position Singapore as a gold trading hub in Asia.
Gan told APPMC attendees that the working group has made good progress and has identified key focus areas across gold product development, vaulting and logistics infrastructure, as well as an efficient gold clearing system for Loco Singapore. “Loco Singapore” refers to gold that is physically stored in Singapore and underpins trading, clearing and settlement activities.
New OTC gold clearing system by end-2026
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In his address, Gan announced four updates from the working group. Firstly, the Singapore Exchange (SGX) will establish an OTC gold clearing system by the end of this year. Interbank trading is expected to build up from 2027 onwards.
Singapore’s new clearing system will support both large bars and kilobars. Large bars weigh about 12.4 kilograms and are the preferred standard for institutional trading and settlement in the London market. Kilobars weigh one kilogram and are the preferred standard in Asian markets. They are also an accepted delivery contract for COMEX gold futures contracts in the US.
“SGX is establishing the OTC gold clearing system for Loco Singapore as a foundational layer for the clearing and settlement of gold flows during Asian trading hours,” says Loh Boon Chye, SGX Group CEO. “Building on existing interbank activity, this will support a deeper and more liquid market over time.”
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Six bullion banks, DBS Bank, Deutsche Bank, ICBC Standard Bank, JP Morgan, Oversea-Chinese Banking Corporation (OCBC), and United Overseas Bank (UOB), will participate as clearing members. A memorandum of understanding between the banks and SGX was signed on June 15.
“As investor demand for global gold grows, we see Singapore playing a complementary role alongside other major hubs by supporting liquidity across time zones and meeting evolving client needs,” says Wai Mei Hong, JP Morgan’s Singapore senior country officer.
Last week, OCBC announced that both its institutional clients and Bank of Singapore clients can transact in and custodise physical gold bars with the bank in Singapore. OCBC was the first in Southeast Asia to offer a tokenised physical gold fund on a public blockchain, and the first in Singapore to offer a physical gold ETF. Fractional paper gold is also available on the OCBC app.
“This initiative further strengthens Singapore’s role as a leading Asia‑Pacific gold trading hub,” says Tan Teck Long, OCBC Group CEO. “OCBC has built strong gold capabilities over the years, which we hope to contribute to the development of a robust and efficient national over-the-counter gold clearing system.”
UOB deputy chairman and CEO Wee Ee Cheong says the bank’s participation as a clearing member will give its clients greater access to investment opportunities. “This collaboration will further strengthen Singapore’s standing as a trusted gold hub, anchored on strong infrastructure, sound governance and clear standards,” Wee adds.
On May 20, Bloomberg reported that Hong Kong is targeting to launch its new gold-clearing system by July. The outlet reported in March that Hong Kong had been inviting central banks that were friendly to China to participate in its gold-clearing system.
"Investors are increasingly seeking trusted venues where gold can be safely held, efficiently managed and transacted with confidence and Singapore is uniquely positioned to meet that demand,” says Jacky Tai, group head of trading and structuring, global financial markets at DBS.
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“As a global financial hub with deep infrastructure, strong policy support and genuine industry commitment, Singapore has the foundations to become a definitive centre for gold flows across Asia-Pacific.”
Secondly, the MAS will be rolling out central bank gold vaulting services by October 2026. The new service is targeted at foreign central banks and sovereign entities, and will complement commercial vaulting services that cater to bullion banks, institutional and high-net-worth investors.
“Beyond secure storage, some foreign central banks and sovereign entities may also be keen to actively manage their gold holdings,” Gan says. “MAS will therefore extend gold accounts to a select group of Singapore-based bullion banks, enabling them to better provide gold-related services and liquidity to these entities.”
Thirdly, new gold-related capital market products are in the works, including a physically deliverable gold futures contract. “These initiatives will complement the OTC gold market, and support a broader range of investment and hedging needs,” Gan adds.
DBS announced on June 11 that it will be offering tokenised physical gold to its retail customers via its digibank app in the second half of 2026. Each DBS Physical Gold Token is backed by one gram of physical gold held by DBS in a Singapore-based vault.
Fourthly, MAS will support greater capital deployment into physical gold among eligible funds and family offices by removing the 5% cap on physical investment precious metals under the tax incentive schemes for funds. The MAS will provide more details by September.
“Asia’s demand for financial services is growing, and so is the need for reliable market infrastructure in this time zone,” Gan says. “Our initiatives will broaden Singapore’s marketplace, so that institutions and companies can manage investments for the long term, preserve value, and transact with confidence.”
