What Is Digital Gold? Know All About E-Gold Products and Why SEBI Is Cautioning Investors
Markets regulator, Securities and Exchange Board of India (SEBI), on Saturday, November 8, 2025, issued a strong advisory cautioning investors against buying unregulated gold-related products such as digital gold and e-gold. So, let’s know what digital gold is and why SEBI has warned investors against it.
Delhi, November 9: Markets regulator, Securities and Exchange Board of India (SEBI), on Saturday, November 8, 2025, issued a strong advisory cautioning investors against buying unregulated gold-related products such as digital gold and e-gold. The regulator said several online platforms were promoting these instruments as an easy and modern alternative to physical gold investment. However, SEBI clarified that such products do not fall under its regulatory framework and therefore offer no investor protection.
The warning comes amid a surge in digital investment options being marketed through mobile apps and online platforms. Digital gold has gained popularity among young investors for its convenience and low entry cost, allowing users to buy fractional amounts of gold through digital platforms. While it offers flexibility and accessibility, SEBI has warned that it also exposes investors to operational and counterparty risks since it is not a regulated asset class. So, let’s know what digital gold is and why SEBI has warned investors against it. Dhanteras 2025: PhonePe Launches Special Cashback Offer on 24K Digital Gold Ahead of Diwali Celebrations.
What Is Digital Gold?
Digital gold is a modern investment option that allows individuals to buy and own gold electronically through online platforms or mobile apps. Instead of physically holding the metal, investors purchase fractional quantities of 24-karat gold, which are securely stored in insured vaults by service providers. This method has become popular due to its convenience, transparency, and the ability to start investing with very small amounts, sometimes as low as INR 1. How To Buy Digital Gold Online Through Google Pay, Paytm and Other Platforms on Akshaya Tritiya 2025.
Unlike traditional gold purchases, digital gold eliminates concerns about storage, safety, and purity while offering easy liquidity. Investors can sell their holdings anytime or choose to redeem them as physical gold in the form of coins or jewellery. Several fintech apps, such as PhonePe, Paytm, and Google Pay, offer digital gold services in partnership with companies like MMTC-PAMP, SafeGold, and CaratLane, making it widely accessible to tech-savvy and first-time investors.
Why SEBI Has Warned Investors Against Buying Digital Gold?
SEBI has cautioned investors against buying digital or e-gold products because they fall outside the regulator’s jurisdiction. SEBI clarified that these offerings are neither recognised as securities nor regulated as commodity derivatives, leaving investors unprotected under existing market laws. The regulator also highlighted potential counterparty and operational risks, warning that buyers could face losses if the platform provider defaults or shuts down.
While digital gold offers an easy entry into gold investment, it remains an unregulated product with no formal investor safeguards. SEBI has advised investors to opt for regulated alternatives like Gold Exchange-Traded Funds (ETFs), Electronic Gold Receipts (EGRs), or Sovereign Gold Bonds (SGBs) for safer exposure to the yellow metal.
(The above story first appeared on LatestLY on Nov 09, 2025 06:34 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).