Overview
- In a Nov. 8 advisory, SEBI said digital gold and e-gold sold on apps operate outside its regulatory ambit and do not qualify as securities or commodity derivatives.
- The notice clarifies that securities‑market protections do not apply to these products, exposing buyers to counterparty, custody and operational risks.
- Adoption has surged on the back of record prices and tiny ticket sizes, with MCX spot gold up about 59% year-on-year and UPI digital gold transactions rising from roughly Rs 760 crore in January to nearly Rs 1,180 crore in August.
- Experts point to reported vulnerabilities such as under‑backed reserves and cybersecurity incidents, including a Rs 1.95 crore theft tied to a digital gold account on the Aditya Birla Capital app.
- Market voices urge shifting to SEBI‑regulated avenues like Gold ETFs, Electronic Gold Receipts and exchange‑traded commodity derivatives, with Zerodha’s Nithin Kamath also warning that GST and spreads can leave buyers down about 6% at purchase.