India's digital gold purchases surge 50% despite SEBI's risk warning
What's the story
India has witnessed a massive spike in digital gold investments this year, with purchases soaring nearly 50% despite regulatory caution from SEBI, the market watchdog. Data cited by The Economic Times, based on estimates from the World Gold Council (WGC), shows Indian investors—led largely by younger buyers—purchased around 12 tons of digital gold between January and November.
Growth metrics
Transaction data reveals significant growth in digital gold purchases
The WGC's estimate is based on transaction data released for the first time by the National Payments Corporation of India (NPCI). The NPCI tracks UPI-based digital gold purchases, showing a clear picture of this emerging market. At current Mumbai spot prices, 12 tons of 24-karat gold would be worth around ₹16,670 crore.
Market response
Digital gold's appeal and regulatory challenges
Digital gold allows consumers to buy, sell and hold gold online without taking physical delivery. The investment can start with as little as ₹1, making it popular among first-time investors. However, demand slowed after the SEBI issued an advisory in November cautioning that digital gold is not a regulated security or covered under existing commodity market rules.
Regulatory response
Industry advocates for self-regulation in digital gold market
Despite the regulatory caution, industry participants argue that digital gold is emerging as a transparent and efficient investment avenue. Leading players in this space include MMTC PAMP, Augmont and SafeGold. They store physical gold in secure vaults on behalf of customers, who can liquidate their holdings anytime through the platforms. The absence of formal regulation has prompted the India Bullion & Jewellers Association (IBJA) to initiate a self-regulatory organization (SRO) for digital gold providers.