E-gold firms seek regulatory cover

Digital gold companies may ask the union government to approve their plans for self-regulation if the Securities and Exchange Board of India (Sebi) refuses to regulate the instrument, said a top executive at the India Bullion and Jewellery Association (IBJA), the apex body for all bullion and jewellery associations in India.

- Apoorva Ajith

The industry has long demanded regulation.

(AP)

On 8 November, Sebi warned investors that digital gold was not under its ambit, clarifying that it did not fall under securities laws and was not classified as a commodity derivative. Following this, the association sent a letter to Sebi on 10 November, asking it to regulate digital gold.

The letter read, “We have been approached by various digital gold companies. They have shown their willingness to be regulated either through Sebi or any other regulator as suggested by you.” It added, “We strongly feel that issuing caution is a welcome step, but issuing guidelines to regulate the same would help investors as well as digital gold companies.”

The industry has long demanded regulation to weed out fraudulent players and offer customers a formal grievance-redressal mechanism, but with little success. "If Sebi does not wish to regulate digital gold, the industry will create a self-regulatory organisation (SRO) and approach concerned government authorities for approval," said Surendra Mehta, national secretary at IBJA. "We are interested in complete transparency," he added.