Singapore launches bank-backed OTC gold clearing hub

The Singapore Exchange will establish an over-the-counter gold clearing platform for physical bullion held in Singapore by the end of 2026, the government and market operators announced on June 15. Six banks have signed on as clearing members: DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC and UOB. The exchange expects interbank trading to develop from 2027 as the system becomes operational.

The Monetary Authority of Singapore will begin offering central-bank vaulting services from October, allowing foreign central banks and sovereign entities to store reserves on the island. The government removed a 5% cap on physical precious metal holdings under certain tax-incentive schemes, enabling eligible funds and family offices to increase allocations to bullion held in Singapore.

Deputy Prime Minister Gan Kim Yong unveiled the package and described the aim as improving connectivity for Asian trading hours, adding ‘Singapore is not trying to replace those markets.’ The package combines the SGX clearing platform, bank clearing members and MAS vaulting to provide settlement and custody options for dealers, asset managers and official reserve holders.

Asian consumers account for roughly 70% of annual global gold demand, while price discovery and large-scale clearing remain concentrated in London and New York. That concentration can leave liquidity thin during Asian hours and make large transactions harder to execute. The World Gold Council has noted that OTC structures often suit large institutional orders because they allow flexibility over timing and execution.

Hong Kong is offering its own competing gold clearing system with a planned July launch and has relaunched gold futures. Both cities aim to capture more clearing and custody business as higher gold prices this year have increased institutional interest.

Banks active in Singapore are extending product offerings beyond wholesale clearing. DBS is preparing tokenized physical gold products for retail customers, and OCBC provides institutional clients with the ability to buy, sell and store metal on the island. Market participants expect the involvement of major global and regional banks to support liquidity and confidence in the new platform.

Regulators and market operators said the package is intended to attract storage volumes and trading flows to Singapore over the next two years. The MAS vaulting service is targeted at sovereign and official reserve holders, while the SGX platform and participating banks aim to service dealers and institutional traders. Which city captures a larger share of Asian clearing and custody business will depend on platform launches, product uptake and the development of interbank liquidity after the systems go live.