Today, whether it’s UPI apps or major jewelry brands, digital gold has firmly established itself in the country’s fintech ecosystem. And why not? After all, UPI users can now purchase e-gold, even 24-karat gold, in a single click for just 10 rupees. But this e-gold purchase could prove costly; we’re not saying this; rather, the public market regulator SEBI has issued a significant warning (SEBI Warning On E-Gold).
E-gold products not under the purview of SEBI
In the recent past, there has been a strong surge in the purchase of digital gold , amidst this increasing sale, SEBI has issued a big alert for the investors regarding this. The market regulator has warned that e-gold is increasing its reach in the market, but it can put the investors at risk. In a press release, the regulator has said that some online platforms offer e-gold products to the investors, which are outside our purview. This digital gold is neither notified as securities nor regulated as commodity derivatives.
If your money gets stuck, no one will help.
According to a Business Today report, the market regulator has emphasized that investors purchasing such products will not be covered by any investor protection systems available in SEBI -regulated markets. This means that if they are defrauded in any way during their purchase, the company selling e-gold declares bankruptcy, or investors’ funds become stuck, investors will not be able to access any recourse through the securities market system in such disputes.
Why is e-gold appealing?
E-gold, or digital gold, is particularly appealing among young and first-time investors, who can easily buy and sell it at low prices. For convenience, the platform reserves the same amount of physical gold for each rupee an investor purchases. Buyers can later sell it online or receive it in the form of coins or bars.
Major players in this sector include MMTC-PAMP, SafeGold, and Augmont Gold. They offer their products through popular fintech platforms such as Google Pay, Paytm, PhonePe, Amazon Pay, Groww, Airtel Payments Bank, and Jio Gold, as well as jewelry brands such as Tanishq Digigold, Jose Alukkas, CaratLane, and PC Jewellers.
SEBI said, “Buy here…”
Experts also agree that digital gold is convenient, but it is not without risks. In recent times, several savings schemes run by jewelers have faced scrutiny for lacking regulatory safeguards. SEBI recommends using regulated instruments such as ETFs or EGRs for investing in gold, which have existing investor protection frameworks.
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