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Indonesia’s Growing Gold Demand Spurs Bullion Bank Expansion

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TEMPO.CO, Jakarta – Indonesia’s Financial Services Authority (OJK) Financing Institution Development Analyst Iwan Partogi stated that the increasing national demand for gold presents an opportunity to develop domestic production capacity and optimize existing gold resources within the community.

Iwan revealed that the volume of Indonesian gold bullion imports will continue to increase from 2016 to 2025, with an average annual growth rate of 29.10 percent.

By 2025, approximately 89 percent of Indonesia’s gold imports will still come from Australia, Hong Kong, Singapore, Japan, and Switzerland, Iwan stated during a discussion on regulatory developments, supervision, and the economic potential of gold banks held by the Indonesian Christian University (UKI), in a statement quoted in Jakarta on Sunday, May 10, 2026.

Furthermore, a bullion bank is not a separate institution or legal entity, but rather a business activity carried out by a financial services institution. The legal basis for this practice is stipulated in the Financial Sector Development and Strengthening Law (P2SK), specifically Articles 130 and 132.

Meanwhile, M. Sis, a leading expert trade analyst at Bappebti (Commodity Futures Trading Regulatory Agency), stated that government-supervised digital gold trading must have an underlying asset in the form of real, physical gold.

According to him, digital gold trading regulations were established to prevent the practice of trading in non-physical gold, which could potentially harm the public.

He explained that Bappebti implements a delivery versus payment (DVP) system, ensuring the physical gold is available before a transaction takes place.

Furthermore, all traded gold must come from legal sources and be free from money laundering, terrorism financing, or other illegal sources.

Regarding the banking industry, BSI representative Rico Wardhana assessed that bullion banking is a strategic step for the government in developing a national gold ecosystem from upstream to downstream.

According to him, Indonesia, as a major gold-producing country, must be able to utilize this potential to strengthen the national economy and expand public investment access.

Rico stated that BSI currently manages around 23 tons of gold, and that gold trading activity through bullion banking has continued to experience significant growth since its launch in 2025.

Pak Prabowo’s simple dream is that every individual should have gold, and should have the opportunity to own gold,” Rico said.

He also revealed that more than one million people have opened gold accounts with BSI in approximately 13 months. Through bullion banking, people can buy gold starting from Rp50,000 and store gold digitally more securely and efficiently.

Meanwhile, tax practitioner Wahyu Widodo believes that the convergence between gold trading and the banking system in bullion banking has the potential to create new tax challenges if regulations are not designed in an integrated manner.

He recalled past experiences where Sharia financing transactions were subject to double taxation because they were considered two separate transactions.

Read: Germany Benefits from Work with Ukraine, Defense Minister Says

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