Singapore’s Abaxx Exchange to trade gold and silver futures

Singapore’s Abaxx Exchange plans to introduce gold futures in the coming months, ...

The contracts – which will be physically deliverable in Singapore – will seek to connect futures and physical markets in one location, tapping into Asia’s potential, according to Mr David Greely, chief economist at the bourse, which is majority-owned by Abaxx Technologies.
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Singapore-based start-up Abaxx Exchange is seeking to challenge the dominance of London and New York in the global bullion market with the launch of a new physical gold contract, following a blistering price rally this year.

The bourse, which has raised more than $100mn from investors including BlackRock and CBOE Global Markets, plans to offer a physical one kilo gold contract next month, denominated in US dollars and deliverable in Singapore.

Chief executive Josh Crumb described the structure of the gold market — in which London is the centre of physical trading and New York the centre of the futures market — as “dysfunctional” because infrastructure has not kept pace with how it is traded.

“Our view is that Asia ex-China needs a gold market, to manage the physical gold, that is not reliant on New York and London,” said Crumb, pointing to “geopolitical” risks in the US and UK.
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Josh Crumb - CEO of Abaxx said:

Interesting. Got a major inbound after the FT Gold article.

Gold/commodity head of one of the major infamous banks wants to get involved in our spot/futures Singapore gold markets. But they want to be able to short our allocated in-vault central limit order book (ie sell metal they don’t have in the vault on the CLOB). I guess based on their “good credit”?

Thoughts?

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The start of a gold-futures contract in Singapore has put the spotlight on a flurry of moves in Asian financial hubs to capitalize on rising interest in the commodity as demand increases and prices surge, just as a dramatic spike in hostilities in the Middle East drove a fresh leg higher.

The BlackRock Inc-backed Abaxx Exchange began offering a US dollar-denominated contract, sized at 1 kilogram (32.15 troy ounces) and locally deliverable, on Thursday. The move will be among developments highlighted at an industry conference organized by the Singapore Bullion Market Association to be held in the city-state over three days from Sunday.
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For Asian traders, vaulting in-region reduces logistical friction. For central banks, especially in emerging markets, it offers insulation from geopolitical risk and greater control over reserves. For gold market makers, it introduces competition into a two-center system that has seen little change since Bretton Woods collapsed.

The move toward Singapore is not a headline trend—it is a structural development.
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Average daily volumes in Gold Singapore Futures (GKS) increased from 200 lots in June to 500–1,000+ lots in August, with consistent days above 1,000 lots and an active curve across four months.
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Launched physically-deliverable Gold Singapore Future (GKS), Abaxx’s first precious metals market, with development underway for additional precious metals including silver, platinum and rhodium.
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The U.S. Commodity Futures Trading Commission (CFTC) review of Abaxx Exchange’s application for recognition as a Foreign Board of Trade (FBOT) progressed in Q2. Once granted, the designation will allow U.S.-based participants to directly access Abaxx-listed products.
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Josh Crumb said:

Had an intense session today on the #gold FDT pilot. Every time we get into the weeds of how finance actually works (a cross-border gold repo for example), you just have to shake your head at some of these cartoon finance notions of “tokenized gold” (from a single issuer) “owned” in a simple smart contact (what do you legally actually own in a bankruptcy or liquidity crisis, what’s the contract and what’s your claim?).

For branded and warrantied Gold to be used as HQLA, with real-time title transfer, risk manageable with deliverable futures into the same spec as an allocated, in-vault spot market Clob gold-pool is hella complex. But we’re doing it, and it’s coming soon to a theatre near you.

The world’s most advanced gold market. $abxx

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