Indonesia has launched a new bullion banking initiative through two state-owned banks, aiming to stabilize foreign exchange and include gold savers in the formal financial sector. This system seeks to utilize the country’s gold production and bolster public trust in financial institutions. The government plans to store privately owned gold domestically and may issue more licenses for additional services in the future.
Indonesia has introduced formal bullion-based banking through two state-owned institutions, PT Bank Syariah Indonesia and PT Pegadaian. This initiative, promoted by President Prabowo Subianto, aims to stabilize foreign exchange by encouraging the domestic handling of the country’s gold production. Officials announced that additional licenses may be issued to expand these services in the future.
The new system seeks to integrate gold savers into the formal financial system by offering gold-focused financial products. As the largest gold producer in the region, Indonesia is set to make significant use of the approximately 1,800 tons of privately owned gold within its borders, promoting the domestic storage and processing of this valuable asset.
Moreover, during the launch, Minister Erick Thohir emphasized the importance of public trust in the formal financial sector. This move is seen as crucial for enhancing monetary stability, particularly as gold is viewed as a reliable hedge against economic crises. Senior Minister Airlangga Hartarto noted, “In every crisis, there are only two safe haven instruments: the American dollar and gold.”
Globally, bullion banking is predominantly controlled by a select few institutions, including JPMorgan and HSBC, which are key players in the complex global gold market. Indonesia’s initiative reflects a growing trend among nations to formalize and regulate gold banking services, aligning with global practices and enhancing economic stability.
In conclusion, Indonesia’s launch of bullion banking signifies an important step in stabilizing its foreign exchange and integrating gold into the formal financial system. By utilizing domestic gold resources and providing trusted services, the government aims to bolster economic stability and public confidence. This initiative may lead to future expansions, drawing on Indonesia’s substantial gold reserves as valuable financial instruments.
Original Source: news.bitcoin.com
