Speaker, “an industrial policy in finance” may seem a contradiction in terms.
But it is not.
(Eurodollar)
The most consequential 20th century financial industrial policy was built by the British, on the then-undisputed reserve asset, the US dollar.
Once, in 19331, the US imposed Regulation Q, capping interest rates American banks could pay. By the late 1960s, the ceiling was 4% while 3-month T-Bills approached 7%2. Dollars held offshore, especially in London, escaped this cap. This offshore dollar market became known as the Eurodollar market.
The British did four things. First, deliberate forbearance - choosing not to regulate offshore dollar deposits. Second, active defence - when G-10 central banks proposed international regulation in the 1970s, the Bank of England blocked it. Third, direct participation - central banks provided official deposits of 20% of net market, and currency swaps with domestic banks. Fourth, after the 1974 banking crises, the G-10 Basel communiqué constructed an implicit lender-of-last-resort guarantee.3
The result: London became the global centre for dollar financing. By the mid-1980s, there were more Eurodollars than dollars4. The Eurodollar market increased the appeal of dollar holdings, deepening liquidity for American borrowing. This privileged position, London held for many decades.
What is instructive was that the British reinvented London’s proposition amidst the decline of sterling. Nostalgia is not a strategy. They re-positioned for their emerging present.
Today, we have another emerging present. Then, interest rate caps created a push factor for the world's reserve asset to move offshore. Today’s push factor is not yield. It is custody risk - the question of whether your reserves are still yours when politics turns. And the emerging reserve asset seeking an offshore home is not dollars. It is gold.
(Gold and Push Factors)
Two forces are driving this shift.
First, access to funds has become conditional on political alignment. In 2022, Western nations froze over $300 billion in Russian sovereign assets. We rightly condemn the invasion of Ukraine — but the knock-on effect on Western financial centrality is real. Trust in those systems has diminished.
Second, market participants are pricing in US asset risk in a way they did not before the 2020s — some call it a 'Sell America' dynamic.
Central banks are responding with their feet. Gold purchases have exceeded 1,000 tonnes annually for three consecutive years5—more than double the 2010-2021 average. The World Gold Council's 2025 survey shows 73% of central banks expect fewer US dollar holdings over five years6. Ninety-five percent expect to increase gold over 2025-20267.
What makes this structural is the price insensitivity - there are few good alternatives for a reserve asset. Central banks bought at $2,000 an ounce, at $3,000 an ounce, at $4,000 an ounce. Gold crossed $5,000 in January.
These are sovereigns seeking safety over returns.
But if gold is becoming a reserve asset, it will need to be financialised. Later, I will describe what that means in five pillars.
(Today and tomorrow)
First, let us assess some major gold hubs of today. London, New York, and Dubai.
(London)
London is the central gold pricing venue and is one of the major custodians for the world’s central banks, via the BoE vaults. It offers unmatched liquidity for gold, especially for the 400oz "large bars" used by central banks.
It is the home of the London Bullion Market Association (or LBMA), which controls the global "good delivery" standard. This certificate is important for liquidity among major financial centres.
In February 2022, after the Russian invasion of Ukraine, the G7 immobilised $300 billion in Russian central bank reserves within weeks. The LBMA suspended all six Russian refiners from the Good Delivery list. The message: custody and market access are conditional on political alignment.
Central banks have responded. In 2024, India repatriated 100 tonnes of gold8from the Bank of England to domestic vaults—its largest movement since 19919. Germany, Hungary, Turkey, and the Netherlands have done the same over the past decade. The repatriation trend is accelerating.
(New York)
The case of New York is a puzzle. In the lead up to Liberation Day in April 2025, as tariff fears spiked, the exchange-for-physical basis, which is the spread between New York COMEX futures and London OTC gold, blew out to $60 per ounce - the widest since the 2020 Covid panic. This led to COMEX vaults in New York hitting a record 43 million ounces. For a moment, most of the world's financialised gold was in New York rather than its typical home in London. New York had custody over both today's reserve asset and tomorrow's, simultaneously.
Consider the counterfactual. A Fed gold repo window, accepting COMEX gold warrants as collateral. Strong financing terms could have made New York the permanent home for monetary gold, since much of it was already in COMEX vaults.
Now, it is true that the Fed conventionally runs repo backstops on Treasuries, agency debt and agency MBS. But that is already an expanded listing over pure Treasuries, pre-2008. So why not COMEX gold warrants? They had the moment — and did not act.
There is no appetite — not yet — to backstop gold in New York. Deep markets, but no lender of last resort.
Asset holders must also weigh IEEPA (International Emergency Economic Powers Act) tail risk — the executive powers used to impose tariffs in February 202510 could be turned on foreign-held assets.
Today, only the US can offer a sovereign repo on gold as they have the reserve currency. So if they do not backstop gold, financialization will likely not proceed on single sovereign rails.
(Dubai)
Dubai is closest to what we could build. Aggressive infrastructure: vaults, multiple refineries, direct African sourcing, and the natural catchment of India. It is estimated that Dubai handles upwards of 15% of global physical gold trade11. In 2023, the UAE overtook the UK to become the world’s second-largest gold trading hub.12
Dubai offers proximity to supply and demand, but also to Gulf conflict dynamics. Singapore offers a trusted node to multiple parties.
Dubai has captured volume partly through more permissive sourcing standards. That is not our game — our competitive advantage is rigor, and any visible compliance failure on money-laundering would destroy the credibility we hope to sell.
But this is not zero-sum competition. The shift to gold is large enough for multiple hubs. And the market interest already exists.
DPM Gan said in response to my January PQ about critical minerals financing, that the government will act "when there is sufficient market interest." The interest is here. In the second quarter of 2025, gold investment in Singapore surged 37% year-on-year. SPDR Gold Shares recorded SGD 309 million in net inflows in the first half of 2025—the highest of any Singapore-listed ETF. The Singapore Mint launched its Lion Bullion line in September, explicitly citing strong investor demand. Private vaults are expanding: The Reserve opened last year with capacity for 15,500 tonnes.13
The market is here. And so is the chance.
(The Landscape)
In that same PQ I posed to MTI in January14I also asked why our framework for metal warrant financing is underutilised. The response from the ministry framed it in terms of the base metals, by referring to the LME ecosystem - which handles the 6 primary base metals - copper, zinc, aluminum, nickel, lead, tin. But not gold.
I had in mind gold, not base metals. Gold operates through the LBMA — different rules, different warehousing, different settlement — and requires purpose-built architecture.
Singapore's gold infrastructure is minimal. We have one LBMA-approved refinery—Metalor, Swiss-owned. CPF members investing in gold through SPDR Gold Shares will see that gold held in London and New York vaults.
What is puzzling is that Singapore seems to be on the other side of the trend. The World Gold Council’s central-bank gold statistics for May 2025 state that year-to-date 2025, Singapore was the second-largest net seller at ~10 tonnes (behind Uzbekistan), and that MAS sold 5 tonnes in May.15
Keep in mind that this was when gold was about 3300 USD per troy oz. Gold today trades at 5000 USD per troy oz, 50% higher than where it was sold, if this report is true. MAS's own disclosures confirm this: gold holdings fell by 849,000 troy ounces from January 2025 to January 2026.
Could the government confirm whether this is true? If so, why does it hold such a contrarian view relative to most global central banks? Does it have a framework for thinking about gold's role in tomorrow's reserve system?
(The Five Pillars)
Sir, let me describe what an industrial policy in gold would look like, in five elements. First, a Sovereign Guarantee.
The core asset Singapore can offer is not location or tax rates. It is legal predictability - the credible commitment that asset treatment follows established judicial process, not executive discretion.
We have already done it once before.
In January 2020, Singapore enacted the International Organisations (Immunities and Privileges) (Bank for International Settlements) Order16. It states that property and assets entrusted to the BIS [Bank for International Settlements], (quote) "wherever located, by whomsoever held and in whatever format, are immune from search, requisition, confiscation, expropriation or any other form of seizure, taking or foreclosure, by any form of legal process." (end quote)
That is the gold standard - forgive the expression - for custody protection. The question is: why only BIS?
Singapore should consider a Reserves Custody Protection Act - or an amendment to the MAS Act - establishing that custody arrangements are governed by Singapore law and due process, immunising it from executive discretion. The principle is legal certainty.
We should be a top choice for jurisdictions seeking diversified custody. Sovereign guarantees are best implemented via sovereign vaults in the same vein as the Bank of England, rather than outsourcing capacity to private parties, as Zurich has done.
Second, a Sovereign Anchor.
If 73% of central banks expect to increase gold holdings, Singapore should be among them - not among the sellers. MAS reserves held in Singapore vaults create the base load that foreign participants need to see. The Eurodollar market had central banks providing 20% of net demand. We should do the same.
Third, Refining, Sourcing, Verification.
It is one thing to have custody, but to have trusted custody requires the above.
Recasting connects markets. Western central banks hold 400-ounce bars. Asian retail buys kilobars. To connect these markets, you need recasting capacity. You need refineries. Singapore has only one. Dubai built multiple refineries with no mining industry. We should expand refining capacity and establish direct relationships with miners in Africa, Australia, Indonesia, and strengthen existing ones with the bullion banks. Precious metals streaming — providing upfront capital to miners in exchange for future production at agreed prices — is one proven vehicle for building those relationships.
Assaying builds trust. Tungsten has nearly identical density to gold - counterfeits exist. In 2020, China’s Kingold was accused of pledging gilded-copper “gold” as collateral for 20bn yuan in loans, turning “gold receipts” into a major credit-fraud event17. Robust verification through X-ray Fluorescence (or XRF) and ultrasound should be part of the chain, if possible, non-destructively to preserve provenance18, but if necessary, destructively by recasting. Not just "is it stored?" but "is it real?" Singapore should build a reputation for rigorous verification that makes our warehouse receipts bankable.
And in our warehouses or vaults, we need strong verification standards, to be able to financialize a wide net of gold collateral, the LBMA-approved and those outside the LBMA system alike. Digital warehouse receipts issued under Singapore standards should be legally enforceable claims.
Fourth, our own standard.
The LBMA sets the global Good Delivery standard. It is valuable. We should emulate it. Create a Singapore Bullion Standards Authority. Launch an Asian Good Delivery standard accepted by major exchanges. Competition between standards is healthy. We should aim to make our standard inter-operable with LBMA, possibly as a custody wrapper on top of LBMA.
To illustrate - within CME, gold receives different treatment depending on standard. COMEX warrants are valid collateral for customer accounts, while London LBMA bullion is not.19
We would be selling liquidity: the guarantee that gold with the Singapore custody stamp can be used as collateral, that banks will lend against it, that it trades on major exchanges.
Beyond custody: liquid markets for price discovery, and financing against verified collateral. We can be a multicurrency hub for gold financing - swapping it for USD, RMB, or other currencies of choice.
Fifth, we should revive the GOFO — the Gold Forward Offered Rate — and the derivatives architecture it enables.
GOFO was the benchmark interest rate at which banks lent gold. The LBMA published it daily until 2015, when it was discontinued — not because the market no longer needed it, but as collateral damage from the LIBOR scandal.
Its main practical use was enabling interest rate swaps on gold. Consider a gold producer hedging future production over five years. The conventional instrument is a long-dated forward — locking in a price to sell gold years from now. The problem is that if gold moves from $3,000 to $5,000, the mark-to-market between counterparties swings accordingly, and that exposure sits unsettled for years. The result is large, volatile collateral calls and significant counterparty credit risk.
An interest rate swap solves this by separating the hedge into two components. The price exposure is hedged with short-dated instruments that settle frequently — so credit exposure resets regularly and never accumulates over years. The cost-of-carry component is hedged via the swap, which is long-dated but insensitive to the spot price, keeping its mark-to-market small and stable.
The combined position achieves the same economic result as the forward, but with a fraction of the counterparty exposure. That means smaller collateral calls, lower capital requirements for banks, and a more efficient market overall.
Reviving a GOFO-equivalent benchmark would restore the infrastructure needed for a functioning XAU IRS market — giving producers and banks a cleaner, less capital-intensive way to manage long-dated gold exposure - including non-dollar currency pairs.
This would give banks the pricing infrastructure to build gold financing capabilities here.
Even if gold's share of reserves stabilises rather than continues to climb, the infrastructure I describe is not wasted. Sovereign vaults, verified warehouse receipts, and derivatives architecture serve any asset class where custody, provenance, and financing matter — critical minerals, rare earths, tokenised commodities. Gold is the use case with the most immediate demand, but the platform outlasts any single price cycle.
(Close)
Sir, in closing.
Financial hubs are not natural phenomena. They are built. The British built the Eurodollar market through deliberate policy — forbearance, defence, direct participation, implicit guarantees — at a moment when sterling was in decline and the world's reserve asset was looking for an offshore home.
Our financial centre was built too on deliberate pillars — rule of law, institutional trust, regulatory predictability. For decades, that was enough. Today, not anymore.
Hedge funds we incubated are opening in Dubai. Family offices we courted are diversifying there. Dubai's financial centre doubled its hedge fund count to over a hundred in a single year. They moved on gold, years ago. They will move on the next thing before we have formed a committee to study it. It is not the nature of the standards, but the structural bet.
We won a windfall when Hong Kong shut itself down during COVID. That was luck. And luck is a depreciating asset.
Jobs, institutional knowledge, relevance — those are the stakes.
Rule of law, institutions, trust — these are necessary conditions. They are no longer sufficient ones. Other cities have learned to offer versions of the same, combined with speed we have not matched.
Gold is not the whole answer. But it is the question: can Singapore still see a structural shift in the global financial system and build for it — or have we become the kind of country that convenes a review after the opportunity has passed?
Because that is the real risk. That the instinct is lost. (...) That this country becomes mediocre.
Because once you become mediocre, derivative, content to be a fast-adopter, there is no bottom to that market.
Thank you, Sir.
