SINGAPORE (Realist English). Deputy Prime Minister, Minister for Trade and Industry, and Chairman of the Monetary Authority of Singapore (MAS) Gan Kim Yong has announced the creation of an over-the-counter (OTC) gold clearing system and the launch of precious metal storage services for central banks.
These measures are designed to transform the city-state into a global gold trading hub.
Speaking at the 9th Asia Pacific Precious Metals Conference (APPMC), the head of MAS noted that gold pricing remains concentrated in London and New York, creating a “practical gap” for participants in the Asian time zone.
‘Loco Singapore’ clearing to launch by end of 2026
The Singapore Exchange (SGX) will launch an OTC clearing system for gold with physical storage in Singapore — the so-called “Loco Singapore” gold. The system is expected to begin operations by the end of 2026, with interbank trading starting in 2027.
The platform will support transactions both with large 400-ounce (approximately 12.4 kg) good delivery bars (the London market standard) and with kilogram bars popular in Asia.
Six major banks will become clearing members: DBS Bank, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC Bank, and United Overseas Bank (UOB). A memorandum of understanding between them and SGX is set to be signed on June 15.
Central bank storage and tax incentives
Starting in October 2026, MAS will offer gold storage services for foreign central banks and sovereign entities. Additionally, the 5% limit on investments in physical precious metals under tax incentive schemes for qualified funds and family offices will be removed. SGX is also studying the launch of a physically deliverable “Loco Singapore” gold futures contract, which would improve pricing efficiency and risk management during Asian trading hours.
Singaporean banks are already expanding their offerings: DBS is launching tokenized physical gold for retail investors, while OCBC allows institutional and private clients to buy, sell, and store physical gold in Singapore.
‘A node, not a replacement’: Singapore’s strategy
Gan Kim Yong emphasized that Singapore does not intend to “replace existing gold trading and liquidity centers.” Instead, the country sees itself as a “trusted node in the global gold ecosystem” that connects regional demand with global liquidity.
Asia accounts for approximately 70% of the world’s annual gold demand, and the existing infrastructure in London and New York is not always able to serve this flow in real time.
Race with Hong Kong
At the same time as Singapore, Hong Kong is making similar efforts. It is also developing its own central clearing system for precious metals, expecting to begin trials in 2026 and a full launch in July. Both financial hubs are striving to fill the gap in global gold infrastructure and compete for the status of Asia’s leading gold hub.
According to the World Gold Council (WGC), gold demand in Singapore surged by a record 42% year-on-year in the first quarter of 2026. The launch of its own clearing system has the potential to attract billions of dollars in liquidity amid growing interest in gold as a safe-haven asset.