Singapore plans to launch a new gold-clearing system this year as it steps up its push to become a major global bullion hub. Big international players, including JPMorgan and Deutsche Bank, are set to join, alongside Singapore’s largest local banks.
How Singapore’s Gold-Clearing Plan Works
The Singapore Exchange will set up an over-the-counter gold-clearing system for “Loco Singapore” gold, which means physical bullion stored in the city. The mechanism should be in place by the end of this year, with inter-bank trading expected to build from next year. The system will support settlements for large bars and kilobars, which are the standard form for professional gold trades.
According to Bloomberg, six bullion banks will act as clearing members at launch: JPMorgan, Deutsche Bank, DBS, OCBC, UOB, and ICBC Standard Bank. Instead of settling each trade directly with one another, these banks will clear through a central platform at SGX. That setup should lower counterparty risk, improve transparency, and help concentrate liquidity during Asian trading hours.
Deputy Prime Minister Gan Kim Yong, who also chairs the Monetary Authority of Singapore (MAS), said the Singapore Exchange “will establish an over-the-counter gold clearing system by the end of this year.” He added that bank-to-bank trading “is expected to build up from next year” as the market adopts the new structure.
Singapore’s Bid to Be a Bullion Hub
Singapore has been building up its gold ecosystem for more than a decade through vaults, trading desks, and logistics. Deutsche Bank and JPMorgan already operate large storage facilities at Singapore Freeport, including vaults capable of holding up to 200 tonnes of gold. MAS now wants to add clearing and central bank vaulting services so that the city can handle every part of the bullion value chain.
In March, MAS and the Singapore Bullion Market Association released a roadmap to develop Singapore as a gold trading center. Their focus areas include creating gold-related capital market products, setting global-standard vaulting rules, and “building a clearing system to support over-the-counter trades of large gold bars and kilobars.” The new clearing platform is the key piece of infrastructure in that plan.
By hosting an active, centrally cleared market in its own time zone, Singapore hopes to attract more institutional flows and give the region a stronger voice in bullion pricing.
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