Singapore has launched a gold vaulting service for foreign central banks, international financial institutions and sovereign entities, opening its national currency vault to overseas bullion reserves. The facility can hold up to 500 tonnes of gold, with room to expand, giving official institutions a sovereign custody option in Asia.
The announcement on Tuesday 10 November forms part of a wider package intended to strengthen Singapore’s role in the gold market. It combines storage for official reserves with changes to the tax treatment of wholesale services and plans for new clearing and futures infrastructure.
Deputy Prime Minister Gan Kim Yong, who also chairs Singapore’s central bank, said several central banks had expressed interest in the vaulting service. He declined to identify them and described the initiative as an extension of Singapore’s role as a trusted financial centre. No prospective users were named.
A new home for reserves
The service is aimed at institutions holding gold on behalf of countries or other sovereign interests, rather than individual investors. Its eligible users are foreign central banks, international financial institutions and sovereign entities. The announced capacity establishes the scale of the facility, but does not indicate how much overseas gold it will initially hold.
Gold forms part of the reserves held by many central banks. Unlike a currency deposit or a government bond, physical bullion requires secure storage and arrangements for custody. The location in which it is held is therefore a practical consideration for institutions managing reserve assets, alongside the decision about how much gold to own.
Central banks have been buying gold at the fastest pace since 2024. Against that backdrop, Singapore’s offer gives reserve managers another place to hold bullion. Expressions of interest indicate potential demand, but they do not establish which institutions will use the service or how much they might deposit.
For London readers, the significance is the potential competition for an established financial activity. Reserve flows have historically gone to London, Zurich or New York. A sovereign custody option in Singapore could capture some of those flows, although the announcement does not establish that gold will be moved from any particular centre.
Tax relief for wholesale services
Alongside the vaulting launch, Singapore’s financial authorities and Ministry of Finance announced an enhanced goods and services tax framework for wholesale gold. It is due to take effect from April 2027 and will extend tax relief to services between institutional participants.
The services covered include vaulting, refining, recasting, assaying and broking. These cover distinct parts of the bullion business: storing gold, processing it, changing its physical form, testing its composition and arranging transactions. The framework therefore reaches beyond the custody service itself to activities that support the wider wholesale market.
The distinction between institutional business and retail purchases matters. The announced relief concerns wholesale services between institutional participants. It should not be read as a general announcement about the tax treatment of every gold purchase, or as a change limited to foreign central banks using the national currency vault.
Clearing and futures plans
Further market infrastructure is planned alongside the custody and tax initiatives. An over-the-counter gold clearing system is targeted to begin live trading and market operations by March 2027. Over-the-counter transactions are negotiated between market participants rather than conducted through an exchange order book.
SGX physically deliverable kilobar futures are targeted for the second quarter of 2027. Physically deliverable futures provide for gold to be delivered under the contract’s terms, rather than the transaction being settled solely through a cash payment. The proposed contracts would add an exchange-based instrument to Singapore’s gold market.
The timetable places the clearing system, enhanced tax framework and futures plans within the same period, but each has a separate purpose. Clearing supports transactions, futures provide a trading instrument, and vaulting provides custody. The next steps are the planned clearing launch by March 2027, tax changes in April 2027 and futures in the second quarter of 2027. Which central banks will use the vault, and how much gold they will place there, remain unknown.
