Indonesia launches Sharia-compliant Gold ETF to expand bullion market

Indonesia's Financial Services Authority (OJK) and stock exchange operators have launched a Sharia-compliant Gold Exchange-Traded Fund (ETF) in Jakarta, with officials describing it as part of efforts to expand the nation's bullion market and improve capital sector liquidity. OJK Board of Commissioners Chairwoman Friderica Widyasari Dewi said the bullion market expansion is a "quick win" within the regulator's eight action plans.

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The new Gold ETF allows investors to track gold price movements on the Indonesia Stock Exchange (IDX) without needing to physically store the metal. The instrument follows Islamic financial principles under a fatwa issued by the National Sharia Council of the Indonesian Ulema Council (DSN-MUI), giving it formal Sharia compliance.

KSEI President Director Samsul Hidayat said the product uses physical gold as the underlying asset, records digital ownership through Electronic Gold Receipts (EGR) at KSEI, and enables participation unit trading on the IDX. Deputy Finance Minister Juda Agung said the instrument is fully collateralized by tangible assets and noted that global Gold ETF assets under management reached US$559 billion and more than 4,025 tons of gold by 2025.

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