The India Bullion & Jewellers Association (IBJA), the country’s leading bullion trade body, has written to the Securities and Exchange Board of India (Sebi) demanding that digital gold platforms be immediately brought under formal regulatory oversight – either by Sebi itself or any other designated regulator – warning that the current unregulated status is exposing millions of investors, especially the young, to potential fraud.
The urgent representation comes just days after Sebi issued a public caution stating that digital gold products sold through apps and websites are neither classified as securities nor as commodity derivatives, placing them entirely outside the markets regulator’s jurisdiction.
As a result, investors in these products do not enjoy the robust grievance redressal and investor-protection mechanisms available for regulated gold instruments such as gold exchange-traded funds (ETFs), sovereign gold bonds, electronic gold receipts (EGRs), or futures traded on recognised commodity exchanges.
Explosive growth of digital gold in India
Digital gold has emerged as one of the fastest-growing investment avenues in the country, particularly among millennials and Gen-Z. Industry estimates suggest that cumulative investments in digital gold platforms crossed ₹8,000–10,000 crore by the end of FY 2024–25, up from barely ₹500 crore five years ago. Major platforms such as SafeGold, MMTC-PAMP’s DigiGold, Augmont Gold, PhonePe Gold, Paytm Gold, and Google Pay Gold have reported 3–5x year-on-year growth in user base and assets under custody.
The appeal of digital gold lies in its convenience: investors can buy 24-karat physical gold starting at ₹1, store it in insured vaults without paying locker charges, and sell it instantly at live market prices. Unlike physical jewellery, there are no making charges, and unlike gold ETFs, there are no annual expense ratios.
For a generation that prefers app-based investing and fractional ownership, digital gold has become the entry point into the yellow metal.Festive and wedding seasons have further accelerated adoption. Platforms reported record sales during Akshaya Tritiya and Dhanteras 2025, with some claiming daily inflows of over ₹50–70 crore on peak days.
Industry seeks clarity amid regulatory vacuum
IBJA national secretary Surendra Mehta told reporters, “We have been approached by several leading digital gold companies who have themselves expressed willingness to come under regulation – either through Sebi or any other regulator the government may suggest. The industry wants a level playing field and transparent rules.”
Mehta added that unregulated growth could erode public trust in gold as an asset class, especially if any platform defaults or is found misusing customer gold.Gaurav Mathur, founder and CEO of SafeGold – one of the largest players that partners with jewellery major Tanishq for vaulting and delivery – emphasised the need for government intervention. “There should be clear guidelines from the government on digital gold.
A proper surveillance and audit mechanism must be put in place to periodically verify that the exact quantity of gold purchased by customers is lying in insured vaults and that liquidation happens only at the investor’s request,” he said.
In its investor alert issued last week, Sebi clarified that digital gold schemes – where platforms claim to buy and store physical gold on behalf of customers – do not fall under the definition of securities or collective investment schemes, nor are they recognised commodity derivatives.
Consequently, investors have no access to Sebi’s online complaint redressal system (SCORES) or the investor protection fund in case of platform failure.With no dedicated regulator currently overseeing the segment, consumer protection falls back on general laws such as the Consumer Protection Act and contract law, which many fear may prove inadequate in case of large-scale defaults.
Call for a dedicated framework
Industry stakeholders are now pushing for either an amendment to existing securities or commodities laws, or the creation of a new category of “digital precious metals” under a suitable regulator. Some have suggested that the Reserve Bank of India, given its experience with deposit-taking entities and vaulting standards, could also play a role.
As digital gold cements its place in Indian households – especially among first-time gold investors under 35 – the standoff between traditional bullion players, fintech platforms, and the regulator has intensified demands for a clear, modern regulatory framework that balances innovation with iron-clad investor protection.
Naorem Mohen is the Editor of Signpost News. Explore his views and opinion on X: @laimacha.
Naorem Mohen
View More PostsNaorem Mohen is the Editor of Signpost News. Explore his views and opinion on X: @laimacha.
