The Monetary Authority of Singapore opened its national currency vault to foreign central banks on Tuesday, offering storage for up to 500 tonnes of gold reserves, and said it would extend a goods and services tax waiver to wholesale bullion services from April 2027.

The two steps give official backing to Singapore's push to become Asia's main gold trading and storage center. For reserve managers in the region, the service adds a sovereign custody option inside Asian trading hours, away from London and New York. For banks, refiners and vault operators, the tax change removes a cost on business that serves institutional clients rather than local buyers.

The new service is open to foreign central banks, international financial institutions and sovereign entities, MAS said in a statement on Nov. 10. Gold will be kept in the national currency vault, which can hold up to 500 tonnes and has room to expand as demand grows. MAS will also offer gold custody accounts to select Singapore-based bullion banks that provide trading liquidity and gold services to those institutions.

MAS described the offer as allocated custody with "efficient access to gold-market liquidity during Asian trading hours." It did not name any central bank that has signed up or disclose fees.

MAS and the Ministry of Finance widen the GST break

Singapore already exempts investment-grade precious metals from GST. Under the enhanced framework announced with the Ministry of Finance, the waiver will extend to specified wholesale services between institutional participants, including vaulting, refining and recasting, assaying and broking.

The goal, MAS said, is a tax treatment that fits the "Loco Singapore" market, where gold changes hands among institutions and is not meant for domestic consumption. The framework is expected to take effect from April 2027, with further details to come at Budget 2027.

The measure follows an earlier change. In June, Deputy Prime Minister Gan Kim Yong said MAS would remove the 5% cap on physical investment precious metals under the tax incentive schemes for funds, letting eligible funds and family offices hold more physical gold in Singapore.

SGX gold clearing system set for early 2027

The vault is one part of a broader buildout. In the same June speech, at the Asia Pacific Precious Metals Conference, Mr. Gan said Singapore Exchange would set up an over-the-counter clearing system for Loco Singapore gold, and six bullion banks, DBS, Deutsche Bank, ICBC Standard Bank, J.P. Morgan, OCBC and UOB, agreed to join as clearing members. He said then that MAS would introduce the central bank vaulting service by October; Tuesday's launch came a few weeks later.

MAS said on Tuesday that industry testing of the clearing system is complete and the rulebook will be finalized soon. Preparations are due to finish by the end of 2026, with live trading and market operations expected to start in the first quarter of 2027 and liquidity building through the year. SGX's physically deliverable Gold Kilobar Futures contract is targeted for the second quarter of 2027.

Taken together, MAS said, the measures should support price discovery and risk management during Asian hours and make Singapore a link to established gold centers rather than a rival to them. Mr. Gan made the same point in June, saying Singapore was "not seeking to replace established centres of gold trading and liquidity."

Competition for Asian gold flows

Singapore is not alone. Hong Kong plans to formally launch its own gold clearing system in early 2027, setting up a race between the two financial centers for the same regional business in the same quarter.

Demand is the draw. Asia accounts for about 70% of annual consumer gold demand, Mr. Gan said in June, and central banks have been steady buyers of the metal as a reserve asset. China's central bank, for one, made its largest gold purchase in three years in October.

Commercial capacity in Singapore is already large. Major private vault providers offer more than 2,000 tonnes of storage, according to the June speech, serving bullion banks, institutions and wealthy investors. The MAS vault adds a smaller, state-run option aimed at reserve managers who prefer a central bank as custodian.

Retail interest has also grown. The LionGlobal Singapore Physical Gold Fund, which holds gold in custody in Singapore, drew more than S$600 million in assets after its launch in November 2025, Mr. Gan said in June.

What happens next depends on uptake. MAS has not said how much gold, if any, foreign reserve managers have committed to the new vault. The more telling numbers will come in 2027, when the clearing system goes live and the kilobar futures contract starts trading, showing whether banks move real volume to Loco Singapore.