Investors, led largely by younger buyers, purchased an estimated 12 tonnes of digital gold during January–November this year.
according to data compiled by the World Gold Council (WGC), even as demand slowed after a recent regulatory caution from Sebi.
The estimate is based on data from the National Payments Corporation of India (NPCI) on UPI transactions for digital gold purchases.
NPCI published this data for the first time this year, ET reported.
ET reported. By comparison, industry estimates suggest Indians bought digital gold equivalent to around 8 tonnes in 2024.
Digital gold allows consumers to buy,
sell and hold gold online without taking physical delivery, with purchases starting as low as Rs 1.
The format has gained popularity among first-time investors and younger users transacting through apps and fintech platforms. However,
momentum slowed after Sebi issued an advisory in November cautioning investors that digital gold is not a regulated security and does not fall under existing commodity market regulations.
unlike gold exchange-traded funds or electronic gold receipts.
The regulator urged investors to assess risks before using such platforms. Despite the caution, industry participants say demand for a regulatory framework is growing.
“Gold continues to hold a deeply rooted place in Indian households as an important asset class and digital gold builds on this legacy by improving access through fractional ownership and transparent,
market-linked pricing, while addressing concerns around storage and purity,” said Sachin Jain, WGC’s regional chief executive for India. “
Digitalisation will be critical to ensuring that gold remains a trusted and relevant asset for Indian consumers.”
he said. Major digital gold providers in India include MMTC PAMP, Augmont and SafeGold. These platforms store physical gold in vaults on behalf of customers.
who can sell their holdings at any time, offering liquidity through digital channels.
The regulatory gap has prompted the India Bullion & Jewellers Association (IBJA) to set up a self-regulatory organisation (SRO) for digital gold players.
The SRO is expected to begin onboarding members in January and aims to ensure that customers’ digital gold holdings are fully backed by physical gold and subject to regular audits.“
We are developing technology to onboard and regulate digital gold players. There will be auditing of all the digital gold players periodically.
This will create confidence among buyers of digital gold and the market will deepen further.”
IBJA national secretary Surendra Mehta said, as quoted by ET.
The association expects to finalise rules and regulations by the end of March or early April next year. Industry executives said millennials and Gen Z account for nearly two-thirds of digital gold buyers.
underlining a broader shift toward digital-first investing.
However, the Sebi advisory triggered uncertainty. “
Post Sebi’s order, there was a lot of confusion in the market,” said a senior executive at a digital gold platform.
“All the stakeholders, including the digital gold buyers, have almost stopped buying gold digitally. We had to convince them to return to the platform,” he said.
