Transcription
Bullion market industry players in Singapore say demand to store gold is growing from countries such as India, Indonesia, and Vietnam. Singapore hopes to position itself as a trusted alternative, but experts say clearer regulations are needed for secure transactions. As for Rohim, reports.
Singapore wants to be the hub to buy, sell, and store gold. In particular, they want to store gold like this for foreign central banks and sovereign institutions. And industry players say that this offer Asian central banks an alternative compared to other institutions in Europe.
With the intensification of geopolitical tensions around the world um in recent years, a lot of central banks are really thinking about what jurisdiction might suit them best for where they place their the one of their most important national reserves. And I think Singapore's rule of law, its relative uh neutrality in terms of world affairs, makes it a very attractive place.
Private vaults like these in Singapore already helps store about 4 billion Singapore dollars worth of gross metals for clients all around the world. Majority of them come from Europe and Australia with a growing number from the US. The firm has also invested in tech to improve security of its stored assets.
If you move things in and out, you just have to make sure said, you know, so bullion and stuff arriving where it needs to go. If it's being stored for the long term, then you might want to build what's called a proof of reserve system, which essentially is something which allows you to track where this gold really is there uh and to provide transparency into said. So, uh these are some of the technological sides of things that can be added on and build more trust.
Currently, some of the world's largest vaults are those run by the New York Fed, which has held as much as 12,000 tons, and the Bank of England with about 5,000 tons. While Singapore may not be able to compete on capacity, industry players say what's more important is ensuring clear rules on ownership and access.
In the UK for instance, there's been a long-standing dispute between the Bank of England and the government of Venezuela. The Venezuelan government has been trying to move its gold out of the Bank of England for some time, but because of um non-recognition of the Maduro regime by the UK government, um that's has sort of held up the movement of this gold. So, I think one thing that Singapore should seek a little bit more clarity on is um you know, what happens when there are disputes on who's legitimate owner of the central bank gold.
The reason why people have to put their gold in custody is if you put your gold in your own country or under your mattress, they are not usable because it's separate from the financial system. If you put it in a trading center, a settlement center, and store there, in case you want to use the gold as a pledge to other financial market activity, it it easily accessible to a trading market.
To grow the bullion market, the Monetary Authority of Singapore is working with the industry to develop gold investment offerings and build a clearing system to support gold trading.