Gold Under Pillows Totals 1,800 Tons, Airlangga Targets Entry into Bullion Ecosystem

Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto has called on state-owned companies PT Pegadaian and PT Bank Syariah Indonesia (BSI) to facilitate the transfer of 20 percent of the nation's estimated 1,800 tons of privately held gold into the formal bullion ecosystem. This "under the pillow" gold, as it's colloquially known, represents a staggering $252 billion in value currently outside the formal financial system.

Hartarto emphasized the government's commitment to downstreaming policies, including the bullion sector, aligning with President Prabowo Subianto's vision. He highlighted bullion as a key component for future economic growth, particularly in enhancing the added value of the mining and energy sectors. The minister sees the formalization of this gold as crucial for national economic development.

“

It was stated that the gold held 'under the pillow' amounts to 1,800 tons, with an extraordinary value of 252 billion US dollars. So, what is the task of Pegadaian and BSI, perhaps 20 percent of it to move from being kept under the pillow to being placed in financial instruments.

The recent establishment of the Indonesia Bullion Market Association (IBMA) is considered a strategic institutional step to integrate the bullion ecosystem. Hartarto stated that IBMA marks a new phase for Indonesia's bullion industry development. Following the establishment of regulatory and institutional foundations, the focus will shift to creating a more efficient, liquid, transparent, and integrated market.

IBMA comprises a diverse range of industry players, from upstream gold mining and manufacturing to downstream refining, bullion dealing, and financing institutions. Currently, 11 companies are members, including PT Pegadaian, BSI, PT Hartadinata Abadi Tbk, UBS Gold, PT Amman Mineral Internasional Tbk, Galeri 24, Brinks Solution Indonesia, ICDX Group, and PT Central Mega Kencana, which manages jewelry brands Mondial, Frank & co., and The Palace Jeweler, along with PT Sentral Kreasi Kencana (SKK Jewels) and PT Laku Emas Indonesia. The association is expected to act as a catalyst for industry collaboration and enhance the competitiveness of Indonesia's bullion market.

“

IBMA is expected to be a catalyst that strengthens industry collaboration while increasing the competitiveness of the Indonesian bullion market.