While most countries fixate on digital currencies, Indonesia is betting big on something ancient: gold. President Prabowo Subianto launched the Bullion Banking Initiative in February 2025, putting two state-owned institutions in charge: PT Pegadaian and Bank Syariah Indonesia. They’re not messing around either—each needs capital of IDR 14 trillion to play this game.
The move is ambitious. Indonesia ranks 7th globally in gold production, pumping out 160 tons annually with massive reserves of 30.2 million tons. That’s a lot of shiny metal. PT Freeport’s new smelter will add another 50 tons of pure gold yearly. Not too shabby.
Economically, the government expects big things. We’re talking a GDP boost of IDR 245 trillion—that’s a 1.6% increase. Plus 800,000 new jobs. The money supply will jump by IDR 156 trillion with only a tiny 0.06% bump in consumer prices. Officials are practically giddy about potentially cutting $2 billion in annual gold imports.
The golden push could supercharge Indonesia’s economy while barely nudging inflation—music to economic planners’ ears.
The system isn’t just about hoarding metal bars. Customers can deposit gold, get gold-based financing, trade it, or convert their private stashes into financial products. The president has emphasized that this Bullion Bank will be a game changer for national finance. These new bullion banks will provide specialized gold deposit services and keep precious metal reserves within the country’s borders. All modern stuff—blockchain tracking, digital certificates, real-time pricing algorithms. Very 21st century for such an ancient asset.
But challenges loom. Indonesians love traditional gold storage—convincing them to hand over family treasures won’t be easy. And can these institutions really keep all that gold safe? Infrastructure in remote areas remains problematic.
Globally, the timing couldn’t be better. Gold prices have skyrocketed to nearly $3,000 per ounce. Indonesia clearly wants to compete with established bullion markets like Singapore while creating its own model that other emerging economies might follow.
The biggest question remains unanswered: could this ultimately change Indonesia’s currency foundation forever? With 201 tons already held by national institutions, the groundwork is certainly being laid. Gold bugs everywhere are watching closely.
