Mitali
Quick Summary
Digital gold is an online or app-based system which allows customers to buy gold in small amounts (even as low as Rs 10 to Rs 100) without physically holding it through platforms run by jewellers, refiners, fintech firms and e-commerce apps. Here, ownership is recorded digitally, and the platform claims to store the equivalent physical gold securely in vaults.
SEBI's Warning
According to SEBI's press release dated 8th November 2025:
- Digital gold is not recognized as a security under the Securities Contracts Regulation Act (SCRA). This means there is no government oversight or investor protection.
- Investors will not get protections available for mutual funds, ETFs or commodity derivatives.
- Investors rely solely on the private platforms credibility, if it fails there is no guarantee of recovering your investment.
- Platforms pool customer gold, but there is no independent audit or transparency about whether the physical gold is actually stored. If there’s fraud, investors may lose their holdings with no recourse.
- Many buyers assume that SEBI oversight exists - SEBI clarified this is not true.
SEBI’s Recommended Alternatives
SEBI suggested safer, regulated alternatives for gold investment:
- Gold ETFs: Exchange-traded funds regulated by SEBI, offering high liquidity and transparency.
- Sovereign Gold Bonds (SGBs): Backed by the government, these are regulated by RBI and offer guaranteed returns.
- Electronic Gold Receipts: Regulated by SEBI, these provide a digital receipt for physical gold stored in vaults.
FAQ :
Digital gold is an online or app-based system allowing customers to buy gold in small amounts without physically holding it, with ownership recorded digitally and the platform claiming to store equivalent physical gold.
No, digital gold is not recognised as a security under the Securities Contracts Regulation Act (SCRA), meaning it is not regulated by SEBI and lacks government oversight or investor protection.
The risks include a lack of government oversight, no investor protection, reliance on the private platform's credibility, and potential loss of investment if the platform fails or commits fraud, as there's no independent audit of stored gold.
SEBI recommends safer, regulated alternatives like Gold ETFs, Sovereign Gold Bonds (SGBs), and Electronic Gold Receipts.
Yes, Sovereign Gold Bonds are backed by the government and regulated by the Reserve Bank of India (RBI).
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