Singapore Launches Central-Bank Gold Vaulting Service With Capacity for 500 Tonnes

Singapore’s central bank has launched a gold vaulting service for foreign monetary authorities and other official institutions, offering secure storage in a national currency vault with capacity for up to 500 tonnes of gold. The Monetary Authority of Singapore (MAS) announced the service on November 10 as part of an effort to expand the city-state’s role in bullion trading and custody.

The offering is aimed at foreign central banks, international financial institutions and sovereign entities, rather than retail investors. MAS is also making custody accounts available to selected bullion banks based in Singapore so eligible institutions can access market services and liquidity without necessarily moving their bullion to another financial centre.

The 500-tonne figure describes how much the existing vault can hold, not how much gold customers have deposited. MAS has not published the amount of bullion held under the new service or named any reserve holders using it. The distinction matters because storage capacity does not, on its own, establish the scale of demand.

The launch comes with separate plans to expand tax relief for specified wholesale gold services and develop local gold clearing. Those parts of Singapore’s programme are on a later timetable, even though the sovereign custody service has now been launched.

How the official-sector gold custody service works

According to the MAS announcement, gold deposited through the service will be kept in Singapore’s national currency vault, with the ability to expand storage capacity if demand warrants it. The central bank describes the arrangement as an additional sovereign custody option for institutions deciding where to hold a portion of their gold reserves.

The custody is allocated. That means specific bars are assigned to each customer, individually identified and recorded rather than represented only by a general claim on a pooled quantity of metal. MAS says it maintains records of holdings and movements, with reconciliations, controlled access and separation of operational responsibilities built into its safeguards.

Eligible customers can deposit or withdraw gold and arrange book-entry transfers of their holdings. The metal they deposit must meet London Bullion Market Association Good Delivery standards. The requirements give the service a defined institutional bullion standard rather than opening the vault to any form of precious metal or personal gold possession.

Access to trading liquidity is designed to sit alongside storage. Singapore-based bullion banks with the necessary experience may apply for MAS custody accounts, subject to eligibility checks and onboarding requirements. Eligible reserve holders can then obtain gold-related services from bank counterparties through bilateral arrangements; the launch does not mean MAS itself is offering unrestricted gold trading to the public.

Singapore’s Asian trading-day location is part of the proposition. Institutions holding gold there could arrange servicing and market access during hours when much of the region is active, rather than relying exclusively on facilities in other time zones. MAS has not disclosed fees, customer commitments or a forecast for how quickly the new capacity might be used.

Tax relief is being extended, not introduced from scratch

MAS and Singapore’s Ministry of Finance also outlined an enhanced Goods and Services Tax (GST) framework for wholesale investment precious metal activities. The proposed change would extend existing GST waivers to certain services provided between institutional participants, including vaulting, refining or recasting, assaying and broking.

This is not a new blanket exemption for gold itself. Singapore already exempts qualifying investment precious metals from GST when imported or supplied locally. Its Approved Refiner and Consolidator Scheme also provides relief for certain supplies between approved refiners and consolidators. The planned expansion addresses specified services around institutional bullion activity, rather than replacing those established rules.

The distinction is set out in the Inland Revenue Authority of Singapore’s existing GST guidance, which explains that investment precious metals must satisfy defined conditions. For example, qualifying investment gold bars generally need at least 99.5% purity and must be capable of trading in the international bullion market. Jewellery and other non-qualifying products do not gain an exemption simply because they contain gold.

The new wholesale-service treatment is expected to take effect in April 2027. The authorities plan to provide further details at Budget 2027, so the exact qualifying arrangements should not be treated as final before those rules are published. MAS framed the extension as support for a local market in which bullion is priced, cleared and settled against gold physically kept in Singapore, often described as a “Loco Singapore” market.

For institutional users, the practical issue is not just the tax treatment of buying or importing a bar. Costs and compliance can also arise when metal is stored, assessed, refined or transferred through intermediaries. By addressing selected services, the government is trying to make the surrounding wholesale infrastructure more workable without announcing a general tax holiday for all gold businesses.

Gold clearing and futures trading are scheduled for 2027

The vaulting service has launched before Singapore’s planned over-the-counter gold clearing system. SGX Group and six founding clearing banks are preparing that infrastructure under a memorandum of understanding reached in June. The participating banks are DBS, Deutsche Bank, ICBC Standard Bank, J.P. Morgan, OCBC and UOB.

MAS said industry testing of the clearing system has been completed, but its rulebook still needs to be finalised. The partners intend to finish preparations by the end of 2026, with live trading and market operations expected to begin in the first quarter of 2027. Liquidity is expected to develop over the course of the year, rather than arriving automatically when the system opens.

A separate SGX product, physically deliverable Gold Kilobar Futures, is targeted for launch in the second quarter of 2027. The futures proposal and the clearing initiative serve different functions from vaulting: storage establishes where bullion is held, clearing helps support settlement of wholesale trades, and a deliverable futures contract would provide another route for institutions to manage price exposure.

Taken together, the measures are intended to make more bullion activity possible within Singapore. Keeping gold in the country can support local settlement, but a deeper market would also require participants willing to trade, make prices and provide liquidity. The official announcement sets out the intended infrastructure and timetable without claiming that Singapore has already become a major centre for physically settled gold trading.

The next operational markers are the final clearing rulebook and the expected start of live clearing in the first quarter of 2027. Budget 2027 should also clarify how the expanded GST relief will apply before its planned April start, while SGX’s deliverable gold futures remain a separate second-quarter target.