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Tokenisation Carries more than its Weight in Gold when it comes to ESG

By Anouska Rayner, Head of Growth Commodities, Paxos

Gold has traditionally been considered a safe haven for investors due to its reputation as a store of wealth and hedge against inflation. This appeal is drawing investors across Asian markets, with Singapore emerging as Southeast Asia’s leading gold trading hub. There’s little sign of this slowing down as Singapore has ambitious plans to grow its share of worldwide gold sales from just 2% currently to between 10% and 15% by 2025.

However, financial institutions globally, including those in Singapore, are under increasing pressure to be transparent about their Environmental Social and Governance (ESG) strategy. Investors increasingly want more than just returns from their investment portfolios and seek investments that align with their values, and ESG investments have become the gold standard.

When it comes to ESG considerations, the transportation of gold poses challenges. Flying vast amounts of gold around the world, in its physical form, requires significant energy consumption. Tokenisation, however, presents an opportunity for gold to shine even brighter in the ESG space. Currently, investors in Asia only attribute 7% of their portfolio to digital assets, but as ESG takes centre stage across the continent, it’s likely that we’ll see more and more investors piling into the space.

So just what are the downstream benefits of tokenised gold for the E, the S and the G?

Environmental

Securely moving around gold bullion bars around the world is time-consuming, extremely environmentally unfriendly, and at times unnecessary. With London Good Delivery trading in 400 oz bars, physical gold is not exactly practical. However, gold doesn’t need to weigh heavy on the shoulders of investors.

When it comes to gold, reducing movement of the physical commodity benefits the environment significantly. Tokenisation reduces gold’s ESG transportation footprint by 99.5% because one does not have to constantly fly the asset around the world. Whilst some gold is needed in its physical form and transportation of it cannot be eliminated completely, tokenisation can eliminate the need for physical delivery of that used for investment purposes, by allowing it to be transferred digitally and to be held in a secure digital vault, otherwise known as a wallet. While its accessibility through tokenisation will inevitably increase trading volumes, the footprint of owning the asset will not.

Social

Globally, 1.4 billion adults remain unbanked, meaning they do not have access to traditional banking services. The tokenisation of gold can benefit unbanked communities by providing them with access to a digital asset, which can lower barriers to investment and participation in the digital economy. Furthermore, tokenisation allows for fractionalisation, enabling investors to own small portions of investment grade assets. Why shouldn’t the retail investor have access to assets to protect their purchasing power and hedge against inflation, just like a central bank?

Tokenisation Carries

The precious metal also offers developing nations well-needed stability. Zimbabwe is an example of a country prone to hyperinflation, but it has benefitted immensely from the adoption of gold-backed currency. The reserve bank attributes a 30% drop in month-on-month inflation to the issuance of gold coins. Tokenisation can make this even more inclusive, accessible and transparent.

Governance

Tokenisation enables much-needed governance and increased transparency in the gold supply chain. By using distributed ledger technologies and smart contracts, tokenised gold is transparent, faster and more efficient. Investors can track the origin and movement of gold from the mine to the final product, ensuring that they invest in ESG-compliant gold that meets responsible mining standards.

A Bright Future?

The Investment Association (IA) and the World Gold Council have suggested reweighting gold within investment portfolios, recommending an increase from 2% to as much as 8%. However, this increase in demand for gold investment must be balanced against the intense ESG ratings pressure that investors face. Although the mobilisation of gold via tokenisation is unlikely to revolutionise ESG investing overnight, the technology is available and where there is an investment will, there is always a way.

ANOUSHKA RAYNER

ANOUSHKA RAYNER leads the growth division for commodities at Paxos. She joined the company in 2020 to drive innovation in the precious metals market both in settlement and infrastructure and to lead the effort for transformation into commodities tokenisation. Rayner has also been in the financial markets for 20+ years, with a range of roles covering electronic execution, post-trade and settlement infrastructure in the foreign exchange market.

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Emily Oh

OPERATIONS & ADMIN EXECUTIVE
Emily Oh is the Operations & Admin Executive, a seasoned professional who values teamwork and effective communication. She is skilled at adapting to new challenges and takes a proactive and resourceful approach to every task. Before joining SBMA, Emily had experience coordinating international travel arrangements and spearheading community initiatives. Her role at SBMA will be providing operational and administrative support for projects and other matters to the team.

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Clara Chang

MARKETING & COMMUNICATIONS EXECUTIVE
Clara Chang joins SBMA as the Marketing & Communications Executive, enriching the team with her extensive experience in content creation, social media management, and digital marketing. Prior to joining SBMA, Clara held the position of Marketing Executive at her previous job. She holds two bachelor’s degrees from the University at Buffalo, one in International Trade and another in Geographical Information Science. Her core duties will include maintaining the SBMA website, managing the quarterly Crucible newsletter, among other responsibilities.

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Mr John Levin

Global Metals
TD Securities
John Levin is the Head of Metal Sales & Trading – APAC at the Toronto Dominion Bank’s Singapore office. Prior to this role, he devoted seven years to leading precious metal sales for the ANZ banking group in his home country, Australia. Notably, from 2009 to 2011, John played a significant role on the management committee of the London Bullion Market Association while serving as the Head of Precious Metals Sales for HSBC Global Banking and Markets in the UK.

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Fabian Lew

MARKETING & COMMUNICATIONS OFFICER

Fabian was a Business Development and Marketing Associate before joining SBMA. He graduated from Singapore Management University with a Bachelor’s degree in Economics.

He has joined SBMA since February, 2022.

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Margaret Wong

BUSINESS DIRECTOR

Margaret Wong, Business Director at SBMA (Singapore Bullion Market Association), brought valuable experience from her previous role at the World Gold Council (WGC). Her tenure at WGC provided her with extensive exposure to the gold community in Singapore and the broader region. This background has been instrumental in establishing strong working relationships within the industry.

Margaret’s role at SBMA encompasses a diverse range of responsibilities. She oversees office management, business support processes, finance, and administrative functions essential for the smooth operation of the team and management committee. Additionally, Margaret handles membership matters, member communications, and addresses public inquiries related to SBMA.

One of Margaret’s key responsibilities is coordinating with the Event Management Company for SBMA’s prestigious annual event, the Asia Pacific Precious Metals Conference. This flagship conference plays a crucial role in the industry, making her involvement pivotal in its success.

Described as resourceful and self-motivated, Margaret Wong brings a wealth of skills and experience to her role at SBMA, ensuring efficient operations and effective engagement within the precious metals community in Singapore and beyond.

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Albert Cheng

Chief Executive Officer

Albert Cheng joined the World Gold Council in March 1993 as a Regional Manager, becoming Managing Director, Far East in 2003. He retired at the end of March 2015 and was subsequently named its Advisor. He has also been an International Advisor to the Shanghai Gold Exchange since 2002.

His marketing career began with Dentsu Young & Rubicam, Hong Kong in the early 80’s. He began gold marketing in July 1985 when he joined the Royal Canadian Mint as a Regional Manager for Southeast Asia.

He was appointed honorary CEO of SBMA in November 2015. He is responsible for the success and strategic development of SBMA, represents the interests of the Association, and is responsible for all the legal and regulatory aspects of the work of the Association. He is the primary contact for regulators and government bodies on bullion market development.

Ms Pawan Nawawattanasub

Ms Pawan Nawawattanasub

CEO
YLG Bullion Singapore Pte Ltd

Pawan is the CEO of YLG Bullion Singapore and founder of YLG Bullion International. She has almost 40 years of experience in the jewellery industry and established YLG in Thailand in 2003. In 2012, she brought YLG to Singapore. She sits on the Board of Directors of the Thailand Gold Traders Association, the Thailand Futures Exchange’s Arbitration Committee, and the Rotary Bangkok committee. She holds a master’s degree in Political Science.

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Mr Shaokai Fan

Head of Asia-Pacific (ex China) and Global Head of Central Banks
World Gold Council
Shaokai Fan is the Global Head of Central Banks at the World Gold Council, responsible for advising governments on gold matters, and enhancing the gold market through engagement, dialogue, and thought leadership. He works directly with central banks and sovereign wealth funds on investment considerations. Prior to this position, Shaokai held multiple roles at Standard Chartered Bank, including Director for Asia Strategic Initiatives and Associate-Director for Public Sector coverage. Shaokai holds a Masters of Public Administration from Columbia University and the London School of Economics, and an undergraduate degree in finance and economics from New York University.

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Mr Alan Liew

Head of Bullion & Commodities Trading
United Overseas Bank Limited
Alan is Head of Bullion and Commodities Trading for Group Trading in Global Markets, United Overseas Bank (UOB). Alan joined UOB and started the bank’s commodities trading business in 2014, previously he spent eight years in Standard Chartered Bank (SCB) trading both precious and base metals. During his tenure at SCB, he obtained the SGE gold trader licence and was part of the pioneering team for the SGE business and the FX quantitative trading team. Prior to trading, he worked for Monetary Authority of Singapore in the Financial Risk Management Division. He holds a BSc (Hon) in Computer Science at National University of Singapore and a MSc in Financial Engineering at Nanyang Technological University.

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Mr Nikos Kavalis

Managing Director
Metals Focus Singapore Pte Ltd
Nikos Kavalis is a founding partner of Metals Focus. He has over 20 years of experience in precious metals, having previously worked for the Royal Bank of Scotland and GFMS. Since September 2019, Nikos has been based in Singapore, where he also runs the local subsidiary of Metals Focus.

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Mr Nuttapong Hirunyasiri

CEO
MTS Gold Global Trading Pte Ltd
Nuttapong Hirunyasiri is the CEO of MTS Gold Group, one of Thailand’s top 10 companies and top 3 bullion companies. He started MTS Gold Group’s first overseas office in Singapore and has been expanding the group business internationally. He focuses on product development and innovation for gold investment, with the aim of being a leader in providing the full suite of gold investment services in the ASEAN region.

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Mr Raman Walia

Executive Director, Head of Commodities Sales – APAC
JP Morgan Chase Bank N.A.

Raman is Executive Director and Head of Commodities Sales, APAC, for J.P. Morgan. He joined JPMorgan in 2008 in New York, moved to Singapore in 2011, and helped expand the precious metals business in the region. Raman has an MBA from Cornell University, and likes to travel in his spare time.

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Mr Andrew Clarke

Head of Brink’s Global Services
Brink’s Global Services Pte Ltd

Andrew Clarke is the Head of BGS (Brink’s Global Services) for Singapore, Indonesia, Malaysia and Brunei. He has held various leadership positions throughout his career in secure logistics and risk management with Brink’s, which started in Hong Kong in 2010. Andrew relocated to Singapore in 2018 to expand the precious metals line of business along with Brink’s portfolio of services and industries.

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Mr Kazuya Naoki

Head of Metals, Asia
ICBC Standard Bank Plc, Singapore Branch

Kazuya (Kaz) Naoki is the Head of Metals, Asia of ICBC Standard Bank in Singapore and is responsible for the precious & base metals sales and trading in the region. He joined Standard Bank Plc Tokyo Branch in 2008 and was relocated to its Singapore Branch in 2013 whose controlling stake was acquired by the Industrial and Commercial Bank of China in 2015. Prior to joining Standard Bank, Kaz spent 11 years focusing on commodity trading and risk management with Mitsui & Co in Tokyo, Sydney and London. Kaz has been serving on the SBMA Management Committee since 2016.

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Mr Vinh Nguyen

Head of Precious Metals, Asia
StoneX APAC Pte Ltd

Vinh Nguyen joined StoneX Group in Singapore at the beginning of 2008 and responsible for its APAC precious metals activities since 2019 until now.

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Mr KL Yap

General Manager, Singapore Refining Business Unit
Metalor Technologies (Singapore) Pte Ltd
KL YAP is the General Manager of Metalor Technologies (Singapore) Pte Ltd’s Singapore Refining Business Unit. He joined Metalor in 2013, initially in Refining Sales. In 2014, he became Refining Business Unit Manager, leading the development of a new precious metal refinery. KL was Vice Chairman of SBMA from 2017 to 2021, now serving as Chairman. With a degree in business commerce, finance, and marketing, he brings prior experience from refinery and heavy industries.