26-2-2025 (JAKARTA) President Prabowo Subianto has inaugurated Indonesia’s first two “bullion banks” in a strategic move to strengthen the nation’s financial sovereignty and capitalise on its burgeoning gold production.
The landmark initiative, unveiled Wednesday, grants operational licenses to Bank Syariah Indonesia—the country’s premier Islamic banking institution—and Pegadaian, a pawnshop subsidiary of state-owned Bank Rakyat Indonesia. These newly designated financial entities will offer comprehensive gold-related services, including deposits, financing, trading and custody arrangements.
“We’ve come to recognise that Indonesia is truly a wealthy nation,” President Subianto declared at the ceremonial launch. He highlighted the country’s impressive gold output, which has reportedly expanded from 100 to 160 metric tonnes, underscoring the untapped potential of the precious metals sector.
Southeast Asia’s largest economy has long been a significant global producer of gold, yet much of this valuable commodity has historically been held in overseas repositories. The establishment of domestic bullion banks represents a deliberate attempt to retain these assets within Indonesian borders and develop the nation’s commodity sector beyond mere extraction activities.
The creation of this specialised financial ecosystem is designed to reduce foreign exchange expenditure by enabling the entire gold supply chain to remain within the country. “We will enhance the service ecosystem and anticipate accelerated deposits and increased gold reserves,” Subianto explained, outlining his vision for the initiative.
Regulatory parameters for these specialised institutions are substantial, with financial firms required to demonstrate capital holdings of at least 14 trillion rupiah (approximately $850 million) to qualify for bullion bank status, according to official regulations governing such enterprises.
