CoFTRA Ensures Digital Gold Has A Physical Form

Photo: Doc. Antara

JAKARTA - The Ministry of Trade (Kemendag) through the Commodity Futures Trading Supervisory Agency (CoFTRA) ensures a physical form of gold in digital gold trading.

Head of CoFTRA Kasan said the certainty of the availability of a physical form of gold in a depository institution is CoFTRA's commitment to continue prioritizing transaction security in order to increase public protection in Commodity Futures Trade (PBK).

This assurance is also stated in the CoFTRA Regulation (Perba) Number 4 of 2019 as amended by Perba Number 13 of 2019 related to digital physical gold trading which focuses on protecting the community.

"Through this policy, the most important thing is to ensure that in digital physical gold trading, the gold really exists. In other words, their investment is safe and not just a record on digital platforms," Kasan said in a statement in Jakarta, quoted from Antara, Tuesday, November 5.

CoFTRA continues to improve regulations in digital physical gold trading based on input from business actors, namely the 1:1 ratio. This means that every gold ownership of digital transactions by customers must be supported by the physical presence of gold which is in accordance with the physical gold stored in a depository institution.

With increasingly clear and transparent regulations, CoFTRA expects growth, especially digital physical gold trading.

Currently, a digital gold physical trading ecosystem has been formed which includes two futures exchanges, namely PT Bursa Berjangka Jakarta and PT Bursa Komoditi and Derivative Indonesia.

The futures clearing institutions include PT Kliring Berjangka Indonesia and PT Indonesia Clearing House. PT ICDX Logistik Bonds and PT Kinesis Monetary Indonesia function as the manager of the storage area.

Meanwhile, PT ABI Commodity Futures acts as an intermediary for digital physical gold traders. In addition, the association in this activity is the Indonesian Digital Gold Traders Association (PPEDI).

Kasan explained, digital physical gold trading is expected to continue to grow along with industrial needs and increasing public trust.

CoFTRA plans to cooperate with existing jewelry gold business players, as well as encourage digitally unlicensed physical gold traders to immediately obtain official permission from CoFTRA.

This step aims to protect the community and provide certainty of doing business for industry players.

"This step is also in line with President Prabowo Subianto's direction through Asta Cita, which emphasizes the importance of synergy between the government, society, and business actors. This is to create an inclusive and sustainable economy, as well as empower the community as well as support national economic growth," he said.

Based on data processed by CoFTRA, during January--September 2024, the value of physical gold transactions digitally reached Rp41.3 trillion. This value increased dramatically by 1,181 percent compared to the same period in the previous year which reached Rp3.22 trillion.

The increase in transaction value is in line with the increase in the value of gold commodities globally. The transaction volume in January--September 2024 also increased, from 35,178.48 kg, an increase of 945.4 percent compared to the same period the previous year which reached 3,365.8 kg.