Sebi Issues Warning on Digital Gold: What Investors Should Know and Safer Alternatives

New Delhi | November 10, 2025 The Securities and Exchange Board of India (Sebi) has issued a fresh warning about the growing trend of digital gold investments, cautioning that many of these products are unregulated and may pose serious risks for investors. The advisory, released on November 8, 2025, aims to alert the public that most digital gold platforms are not monitored by any government body, including Sebi or the Reserve Bank of India (RBI). Digital gold lets users buy, sell, and store small quantities of gold online through mobile apps—without physically owning it. While the idea seems convenient, Sebi has clarified that these platforms operate outside its jurisdiction, meaning no investor protection applies if a company defaults or shuts down. Financial expert Abhishek Kumar, a Sebi-registered advisor, explained that the regulator’s warning is meant to inform, not ban. He noted that without regulatory oversight, investors face counterparty risks—where platforms could fail to deliver or redeem gold—and operational risks, as there’s no guarantee the physical gold even exists or is stored safely. Sebi has urged investors to consider regulated alternatives like Gold Exchange-Traded Funds (ETFs) or Electronic Gold Receipts (EGRs). These options are overseen by Sebi, traded on stock exchanges, and backed by transparent systems and legal protection. Digital gold has attracted millions due to its accessibility—allowing investments as low as ₹10—but Sebi’s caution serves as a reminder that convenience shouldn’t replace safety. Experts suggest using digital gold only for short-term or symbolic purchases, and shifting long-term investments to Sebi-regulated products for better transparency and security. Sebi Issues Warning on Digital Gold: What Investors Should Know and Safer Alternatives The Securities and Exchange Board of India (Sebi) has issued a warning about the risks associated with digital gold investments. These platforms allow users to buy, store, and sell small amounts of gold online without physically holding it. While convenient, many digital gold apps are unregulated and fall outside Sebi’s supervision, leaving investors unprotected in case of defaults or operational failures. Experts highlight several risks. Without regulatory oversight, there is counterparty risk—the platform may fail to deliver gold or honor redemptions. There is also operational risk, as investors cannot independently verify whether the gold backing their investment actually exists or is securely stored. Sebi recommends that investors consider regulated alternatives such as Gold ETFs and Electronic Gold Receipts (EGRs). These products are overseen by Sebi, traded on exchanges, and come with legal protection and transparency. While digital gold is suitable for small, short-term or convenience-based investments, long-term holdings are safer in Sebi-regulated instruments. The regulator’s advisory does not ban digital gold but stresses the importance of understanding the difference between unregulated and regulated products. Investors are urged to prioritize safety and legal safeguards over ease and accessibility.