Avoid buying digital gold

NEITHER SEBI NOR RBI REGULATES E-GOLD, EXPOSING INVESTORS TO ELEVATED RISKS

- SAIKAT NEOGI

THE SECURITIES AND Exchange Board of India (Sebi) has cautioned investors against investing in digital gold offered by online platforms.

These products fall outside Sebi's regulatory purview and lack investor protection safeguards.

Investors must ask for a third-party vault certificate confirming physical gold holding before purchase. If the platform does not provide such a certificate, individuals should avoid investing in digital gold. If the platform is not transparent, existing investors should redeem and invest in Sebi-regulated gold products.

Sales of digital gold up

Investors buy digital gold online without holding the metal in the physical form. Three metal trading companies—Augmont Gold, MMTC-PAMP India (a joint venture between state-run MMTC Ltd and Swiss firm MKS PAMP) and Digital Gold India with its SafeGold brand— sell digital gold. Several fintech platforms such as Paytm, Google Pay, PhonePe, InCred Money sell digital gold.