Pegadaian Prepares to Convert Gold ETF Holdings Into Physical Bullion

Pegadaian says gold ETF investors may eventually be able to turn their holdings into physical bars, but the practical system for doing so is not yet ready.

Dharma Satria, head of the bullion operations department at the state-owned pawnbroker, said Pegadaian's existing platform can convert digital gold balances into physical gold. The company is now preparing the process that would connect that capability to gold ETFs.

"The physical printing is possible," Dharma said at the Syailendra Media Talks event in Jakarta on Aug. 31. He added that the final operating procedure still needs to be completed. Pegadaian's subsidiary, Galeri 24, would support the production of the physical gold.

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The physical printing is possible

Agustinus Candra, operations group head at Syailendra Capital, said the prospectus for the Syailendra ETF Sharia Gold fund already includes in-kind redemption. Investors could receive physical gold assets rather than cash alone, but transfers of Electronic Gold Receipts between custodian banks, Pegadaian and other parties still require technical rules.

"It is already accommodated in POJK 2, it's just that the mechanism is not yet regulated," Candra said. The regulation, effective since Feb. 23, 2026, requires gold ETF prospectuses to explain redemption using physical or non-physical gold assets where applicable. It also requires at least 95% of net asset value to be invested directly in gold, with the remainder allowed in domestic money-market instruments, deposits or cash equivalents. The underlying gold must meet specified purity standards.

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It is already accommodated in POJK 2, it's just that the mechanism is not yet regulated