Hong Kong's (China) move takes place in the context of gold trading centers in Asia increasingly expanding their role in the global supply chain and valuation of precious metals. In recent years, the demand for gold trading, depository and payment in the region has increased along with the trend of central banks increasing gold reserves and investment capital in precious metals shifting strongly to Asia.
On July 8, the Financial and Treasury Services Department (FSTB) officially announced the trial operation of a centralized gold payment and clearing system. This is one of the key initiatives to build a modern, complete gold trading ecosystem and consolidate its position as an international precious metal trading center.
Along with the trial operation, the first gold batch has been put into the designated depository, and the first payment and clearing transactions have also been completed. The trial phase involves the participation of many market participants, including banks, financial institutions, mining enterprises, gold refining units, jewelry businesses and investment organizations.
According to FSTB, Hong Kong (China) will simultaneously implement a series of initiatives to improve the gold trading ecosystem, including the initial implementation of the Delivery Connect mechanism with the Shanghai Gold Exchange, putting into use the HAU gold price index, expanding gold storage and refining capacity, diversifying gold investment products, researching tax incentive policies and establishing industry-led associations. These measures are expected to strengthen its role as a reputable gold trading, clearing and depository center in the international market.
The system is operated by Hong Kong Precious Metals Central Clearing Company Limited (HKPMCC). HKPMCC provides payment and clearing services for bilateral gold transactions as well as decentralized gold transactions (OTCs).
The Board of Directors of HKPMCC includes representatives of the Hong Kong Special Administrative Region Government (China), the Shanghai Gold Exchange, management agencies and 11 banks.
