Digital gold in India began around 10–12 years ago. The entry of fintech companies gave a boost to this product. Today, platforms like PhonePe, Paytm, and Google Pay allow investors to invest in digital gold conveniently.

SEBI Issues Warning

The Securities and Exchange Board of India (SEBI) has cautioned investors about digital gold. On November 8, SEBI issued a statement highlighting the risks involved in investing in digital gold. In recent times, investor interest in digital gold has surged. SEBI pointed out that this product does not fall under any regulatory framework, making it inherently risky. The regulator has recommended investing in regulated products like gold ETFs, which are fully overseen.

History of Digital Gold in India

Digital gold started gaining traction about a decade ago, and fintech companies helped popularize it. MMTC-PAMP is a leading player in the digital gold market, while branded jewelers like Tanishq also allow investors to invest in digital gold.

Invest with Small Amounts

Digital gold offers an easy way to benefit from gold price appreciation. Fintech and other companies allow investors to start with as little as ₹10. Investments are made electronically, enabling individuals to invest from their smartphones at home. Once investments reach a certain limit, they can be redeemed. Some jewelry brands also allow investors to convert their digital gold into physical jewelry.

Rising Interest Due to Gold Price Surge

Several factors have driven investor interest in digital gold:

• Small investment amounts are sufficient to start.

• No need to worry about physically storing gold.

• Can be invested from home.

Experts note that gold prices have risen sharply in recent years, further increasing interest in digital gold. Investments via UPI grew from ₹762 crore in January to ₹1,410 crore in September this year.

Investors Unaware of Risks

Experts warn that most investors are unaware that digital gold is unregulated. Many see it as an easy alternative to gold ETFs, gold mutual funds, or sovereign gold bonds (SGBs), without realizing the risks involved. SEBI’s November 8 statement aims to alert investors about these risks.

SEBI’s Objective

SEBI’s goal is to raise awareness among investors. The regulator notes that if investors incur significant losses in digital gold, the government cannot provide assistance because the product is not regulated.