August 31, 2026 | 06:56 pm
TEMPO.CO, Jakarta - State-owned pawnbroker Pegadaian announced that the mechanism connecting exchange-traded fund (ETF) gold with the physical gold printing process is currently in the preparation stage, although the service is allowed under existing regulations and technical systems.
Bullion Operation Department Head of PT Pegadaian, Dharma Satria, stated this in response to questions regarding whether gold ETF owners can convert their investments into physical gold.
"The physical printing is possible," said Dharma during the Syailendra Media Talks titled "Gold 360°: One Asset, Four Perspectives" in Jakarta on Monday, August 31, 2026, as quoted by Antara.
Dharma explained that Pegadaian's system allows digital gold balances to be converted into physical gold. However, the exact operational procedure connecting this feature to gold ETFs still needs to be finalized. "We are currently preparing for the process," he said.
According to him, the capability to print physical gold is supported by Galeri 24, a Pegadaian subsidiary operating in gold manufacturing.
At the same event, Group Head Operations of PT Syailendra Capital, Agustinus Candra, stated that the prospectus for the Syailendra ETF Sharia Gold (XSGO) Shariah Mutual Fund includes an option for in-kind redemption using physical gold assets rather than cash alone. However, technical procedures for transferring Electronic Gold Receipts (EGR) between custodian banks, Pegadaian, and related parties must still be finalized before the feature can be implemented.
"It is already accommodated in POJK 2, it's just that the mechanism is not yet regulated," said Candra. Financial Services Authority Regulation (POJK) Number 2 of 2026 stipulates that gold ETF prospectuses must contain procedures for redeeming Participation Units by exchanging them for physical or non-physical gold assets, where applicable. The regulation has been in effect since February 23, 2026.
Under primary market mechanisms, the redemption of Gold ETF Participation Units from investment managers can only be executed by sponsors and participating dealers. Redemption payments can be made using gold assets from the ETF portfolio or cash, calculated based on Net Asset Value (NAV).
The regulation also mandates that at least 95 percent of a gold ETF's NAV be invested directly in gold assets, with a maximum of 5 percent allocated to domestic money market instruments, bank deposits, or cash equivalents. The underlying gold assets must meet a minimum purity standard of 99.9 percent for gold certified under the Indonesian National Standard (SNI) or 99.5 percent for gold meeting London Bullion Market Association Good Delivery List standards.
Meanwhile, POJK 2 defines an Electronic Gold Receipt (EGR) as electronic proof of gold ownership issued against verified physical gold holdings. The receipt must detail the purity level, authenticity, value, and volume corresponding to the underlying physical gold.
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