The Securities and Exchange Board of India (SEBI) has issued a strong advisory cautioning investors against putting money into unregulated ‘Digital Gold’ or ‘E-Gold’ products being sold through online platforms, warning that such investments do not fall under its regulatory ambit and lack investor protection safeguards.
In a press release on Saturday, SEBI said it had observed that several digital and online platforms were promoting schemes to buy and sell gold in digital form, presenting them as safe and convenient investment options. However, the market regulator clarified that these products are neither classified as securities nor regulated as commodity derivatives, placing them completely outside SEBI’s jurisdiction.
“These digital gold products are not SEBI-regulated instruments and may carry significant risks,” the statement read. “They expose investors to counterparty and operational risks, and none of the investor protection mechanisms applicable to securities markets would be available for such investments.”
Popular Brands Among Sellers
The warning comes at a time when interest in online gold investments has surged, with numerous established brands and fintech platforms entering the digital gold market.
Tanishq, for instance, promotes its “Tanishq Digital Gold” as a trusted and transparent way to purchase 24 Karat pure gold, claiming that customers can start their savings journey with as little as ₹100. Backed by Tata and powered by SafeGold, the company allows investors to buy, store, or redeem their digital gold through its website or across 350+ Tanishq stores nationwide.
MMTC-PAMP, another major player, describes itself as the “leader in digital gold,” offering customers the flexibility to buy, sell, or redeem gold at any time. Similarly, Aditya Birla Capital, CaratLane, Jos Alukkas, PhonePe, and Shriram Finance have also rolled out digital gold schemes starting from as low as ₹10.
While these brands are reputed and backed by large business houses, SEBI warned that even such products, regardless of credibility, remain unprotected under its regulatory framework in case of defaults or disputes.
What Investors Should Know
The regulator reminded investors that SEBI already provides multiple regulated avenues to invest in gold, including Gold Exchange-Traded Funds (ETFs), Exchange-Traded Commodity Derivatives, and Electronic Gold Receipts (EGRs) all of which are traded on recognized stock exchanges and come under SEBI oversight.
Investments through SEBI-registered intermediaries in these instruments are governed by established investor protection mechanisms, unlike digital gold platforms that operate independently of any financial watchdog.
Traditionally, jewellers had offered monthly gold saving schemes where customers paid 11 instalments and the jeweller contributed the 12th. However, such unregulated practices were later discouraged by the government due to potential risks and lack of safeguards similar to the concerns SEBI now raises over digital gold.
The regulator’s latest caution serves as a timely reminder amid rising digital gold promotions and festive season marketing campaigns that promise convenience but come with no regulatory safety net.
