Singapore to launch gold vaulting service for foreign central banks, ease taxes to boost bullion trad

Singapore's central bank will launch a gold vaulting service for foreign central banks and international financial institutions while introducing tax incentives for companies operating in the bullion market, as the city-state seeks to strengthen its position as a global precious metals trading hub, Reuters reported.

The Monetary Authority of Singapore (MAS) said on Tuesday that the new service would allow foreign central banks, international financial institutions and sovereign entities to store bullion reserves in Singapore's national currency vault, which has a storage capacity of 500 metric tons.

The initiative is aimed at capitalising on growing demand for gold as a reserve asset and strengthening Singapore's role as a trusted financial centre. Deputy Prime Minister Gan Kim Yong, who is also the trade and industry minister and chairman of MAS, said developing the gold market was a natural extension of Singapore's position as an international financial hub, Reuters reported.


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Gan said central banks were seeking additional options to strengthen the resilience of their reserves amid growing demand for gold. He added that some central banks had already expressed interest in the proposed vaulting service but declined to identify them, citing confidentiality.

Alongside the vaulting initiative, MAS and the Ministry of Finance will introduce a new tax framework from April next year. The proposed changes will extend tax relief for gold to wholesale services involving institutional participants, including vaulting, refining, recasting, assaying and broking.

According to MAS, the measures are intended to deepen Singapore's gold market, improve price discovery and facilitate risk management during Asian trading hours. They are also expected to strengthen the country's links with established gold trading centres and global liquidity pools, Reuters reported.

The latest initiatives form part of Singapore's broader efforts to develop its bullion market infrastructure. The country is preparing to launch an over-the-counter gold clearing system by the end of this year, with live trading and market operations expected to begin by March 2027. Gold market liquidity is expected to build progressively through 2027, MAS said.

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Separately, Singapore Exchange's physically deliverable gold kilobar futures contract is targeted for launch in the second quarter of 2027.

Singapore's push comes amid intensifying competition among Asian financial centres to attract a larger share of the global bullion trade. Hong Kong has also been stepping up efforts to expand its gold storage capacity and establish itself as an international gold trading centre, Reuters reported.


(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)