Singapore is working with banks including JPMorgan, UBS and ICBC Standard Bank to develop a regional hub for physical gold trading and storage, Bloomberg reported.

Authorities are exploring ways to expand the city-state’s bullion market as demand for gold grows across Asia and financial centres compete to attract trading and storage activity.

According to people familiar with the matter, the Monetary Authority of Singapore has been consulting global bullion dealers and banks alongside local lenders DBS Group, UOB and OCBC.

The initiative is expected to focus largely on institutional participants such as central banks and family offices.

The discussions remain at an early stage and the scope could still change.

Singapore has previously taken steps to support the bullion market.

The government removed goods and services tax on investment-grade precious metals in 2012 in an effort to encourage trading activity. Market infrastructure is also being reviewed.

Singapore Exchange is assessing whether industry demand could support a new gold contract after its Kilobar Gold Contract, introduced in 2014, was discontinued in 2018 following weak trading volumes.

MAS said it has been engaging market participants since last year and will provide further details on potential initiatives in due course.

Among domestic lenders, UOB remains the only Singapore bank offering retail customers physical gold purchases together with vault storage services.

OCBC has said it is exploring custody services for physical gold aimed at institutional and affluent clients.

Featured image: Edited by Fintech News Singapore, based on image by wtmn via Freepik