The Securities and Exchange Board of India (SEBI) has cautioned investors against investing in “Digital Gold” or “E-Gold” products offered by various online platforms, stating that these instruments fall outside the purview of SEBI’s regulation and do not qualify as securities or commodity derivatives.
In a circular, the regulator said, “It has come to the notice of SEBI that some digital or online platforms are offering investors to invest in ‘Digital Gold/E-Gold products’. Such products are different from SEBI-regulated gold products, as they are neither notified as securities nor regulated as commodity derivatives.”
SEBI added that it already allows investment in regulated gold-linked instruments, such as Gold Exchange Traded Funds (ETFs), Electronic Gold Receipts (EGRs), and exchange-traded commodity derivative contracts, which are subject to its supervision and can be accessed through SEBI-registered intermediaries.
However, the market regulator warned that the so-called digital gold schemes marketed by several fintech and jewellery platforms operate outside its jurisdiction.
“They operate entirely outside the purview of SEBI and may entail significant risks for investors, exposing them to counterparty and operational risks,” it noted, adding that investor protection mechanisms available under securities law will not apply to such products.
Over the past few years, several brands including Tanishq, MMTC-PAMP, Aditya Birla Capital, Caratlane, Jos Alukkas, and PhonePe have launched digital gold offerings, enabling customers to buy fractional gold starting from as little as ₹10 or ₹100. These platforms often promote digital gold as a seamless and convenient alternative to physical purchases.
For instance, Tanishq describes its digital gold as “a trusted and transparent method of purchasing 24 Karat pure gold to start your golden savings journey with the trust of Tata and powered by SafeGold.” Similarly, MMTC-PAMP promotes itself as “the leader in digital gold” allowing customers to buy, sell or redeem gold anytime.
While these companies are reputed and established brands, SEBI underscored that investments made through them do not come under its investor protection framework. Although the risk of default may be low with large players, the absence of regulatory oversight means customers have limited recourse in the event of disputes or operational failures.
The advisory serves as a timely reminder for investors to differentiate between SEBI-regulated gold investment avenues and unregulated online products marketed under the digital gold label.
