Singapore challenges London: a new gold clearing system shifts the balance of power in Asia
Singapore officially launches a large-scale program to transform into the main gold trading hub in the Asia-Pacific region. On June 15, Deputy Prime Minister Gan Kim Yong presented a package of initiatives supported by six of the world's largest banks — DBS, Deutsche Bank, ICBC Standard Bank, JPMorgan, OCBC, and UOB. These financial giants have joined the creation of a new over-the-counter (OTC) clearing system for physical gold stored on the island.
A key element of the strategy is the launch of interbank trading, expected from 2027. Meanwhile, by the end of 2026, the Singapore Exchange will open an OTC clearing system for physical metal. This is a direct challenge not only to Hong Kong, which plans to launch its own clearing in July, but also to the established hegemony of London and New York.
Why now?
The statistics are relentless: Asia accounts for about 70% of global annual gold demand. However, pricing and key liquidity are still formed in Western time zones. This creates a systemic problem for Asian traders: during local trading hours, liquidity drops, making large transactions difficult. Singapore aims to correct this imbalance by becoming a bridge between Asian demand and global liquidity.
The Monetary Authority of Singapore (MAS) will begin offering gold storage services for foreign central banks and sovereign funds starting in October. In addition, the 5% limit on investments in physical precious metals for funds and family offices is being lifted. This opens the gates for institutional capital, which can now freely increase the share of gold in portfolios.
Hong Kong does not give up
Competition between the two Asian hubs is heating up. Hong Kong plans to launch its own clearing system as early as July, securing support from several banks and establishing connections with central banks. However, the Singapore initiative has a significant advantage: the support of six global banks is not just a declaration but a real infrastructure base for commercial success.
Notably, DBS, one of the system's participants, is preparing to issue tokenized physical gold for retail clients. Meanwhile, its competitor OCBC is already actively buying, selling, and storing precious metals for institutional investors in Singapore.
Analyst comment: Singapore is not trying to completely displace London — that is impossible in the short term. But creating an Asian price benchmark for gold is a matter of time. If the system works as intended, we will witness a fundamental shift in the global structure of the precious metals market. For crypto investors, this is a signal: traditional finance is actively seeking new infrastructure solutions, and blockchain technologies could play a key role here.