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International Bullion Exchange

  • IASbaba
  • August 19, 2021
  • 0
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International Bullion Exchange

Part of: GS Prelims and Mains GS-III- Economy

In news: International Financial Services Centres Authority (IFSCA) chief launches pilot run of International Bullion Exchange; to go live on October 1, 2021, the Foundation Day of IFSCA.

  • The IFSCA (Bullion Exchange) Regulations, 2020, were notified on December 11, 2020, which, inter alia, covers the Bullion Exchange, Clearing Corporation, Depositories and Vaults.

What is Bullion?

  • Bullion is gold and silver that is officially recognized as being at least 99.5% and 99.9% pure and is in the form of bars or ingots and is often kept as a reserve asset by governments and central banks.
  • Bullion can sometimes be considered legal tender, most often held in reserves by central banks or used by institutional investors to hedge against inflationary effects on their portfolios thus creating Bullion Market.

Key Takeaways

  • The International Bullion Exchange shall be the “Gateway for Bullion Imports into India”, wherein all the bullion imports for domestic consumption shall be channelized through the exchange.  
  • The government has also taken steps to notify bullion spot trading and bullion depository receipts, with the underlying bullion as financial product and bullion-related services as financial services.
  • Significance of International Bullion Exchange:
    • Brings all the market participants at a common transparent platform for bullion trading 
    • Provides an efficient price discovery
    • Assurance in the quality of gold
    • Enable greater integration with other segments of financial markets 
    • Help establish India’s position as a dominant trading hub in the World.

News Source:  PIB

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