Digital Gold: SEBI’s Warning, Investment Risks, and Safe Alternatives
What is Digital Gold?
Digital Gold is an innovative way to invest in gold online without physically owning it. Through mobile apps or websites, investors can buy, sell, and store gold digitally, often starting from as little as ₹10. The purchased gold is claimed to be backed by real, 24-karat gold stored securely in vaults managed by the platform’s partner institutions.
Platforms such as SBI, Tanishq, MMTC-PAMP, and SafeGold have popularized digital gold investment and even introduced digital gold SIP (Systematic Investment Plan) to allow small investors to accumulate gold over time.
However, despite its rising popularity, digital gold investment is not regulated by SEBI, the Securities and Exchange Board of India, which raises significant investor protection concerns.
SEBI Digital Gold News — Latest Updates
In the latest Digital Gold SEBI news (November 2025), SEBI issued a strong investor warning against unregulated digital gold products. The regulator cautioned that several online platforms are offering digital gold online schemes that do not fall under SEBI’s regulatory framework.
According to the official SEBI statement, such digital gold products are not classified as “securities” or “commodity derivatives.” Therefore, investors are not entitled to any legal protection under SEBI regulations.
SEBI further stated that many of these products lack transparency in gold storage, audit, and redemption processes. Investors could face loss of capital if the platform fails or the gold backing turns out to be non-existent.
To safeguard investors, SEBI suggested switching to regulated options such as:
- Gold Exchange-Traded Funds (Gold ETFs)
- Electronic Gold Receipts (EGRs)
- Sovereign Gold Bonds (SGBs)
These instruments are fully regulated under SEBI and the Reserve Bank of India (RBI), ensuring higher safety and credibility.
SEBI’s Past Actions on Digital Gold
This is not the first time SEBI has raised concerns. In August 2021, SEBI directed stockbrokers, investment advisors, and portfolio managers not to sell digital gold via their trading platforms. Both NSE and BSE later issued circulars enforcing this restriction.
The core reason: Digital gold is outside SEBI’s jurisdiction, as it does not qualify as a “security” or a “commodity derivative.” Since then, SEBI has repeatedly highlighted the need for a formal framework before allowing digital gold trading on regulated platforms.
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SEBI on Digital Gold Risk
SEBI has made it clear that investing in unregulated digital gold is risky. Below are the key concerns outlined by the regulator:
- No Regulatory Oversight: SEBI does not monitor digital gold platforms, meaning there is no guarantee that your investment is safe.
- Storage & Authenticity Risk: The gold supposedly held in vaults may not be audited or even exist.
- Price Manipulation: Unlike exchanges, there is no uniform pricing standard, so digital gold investment price can vary widely.
- Counter-party Risk: If the company offering digital gold goes bankrupt, investors may lose their holdings entirely.
- No Legal Recourse: Since it’s unregulated, investors cannot seek SEBI’s help or protection if disputes arise.
Hence, SEBI recommends using regulated gold instruments like ETFs or SGBs, which are transparent, backed by government oversight, and easily tradable.
Should You Invest in Digital Gold?
Digital gold offers convenience, real-time value tracking through digital gold graph tools, and easy online access — but investors must weigh the benefits against the regulatory risks.
If you are considering gold investment through digital platforms, always verify:
- Whether the platform is linked to SEBI-registered entities.
- Who holds the physical gold and whether it is independently audited.
- The process for redemption or physical delivery.
For beginners, digital gold investment SBI or government-linked portals are safer than private apps. Still, SEBI advises prioritizing regulated options until formal guidelines for digital gold are introduced.
The Future of Digital Gold Regulation
SEBI and the government are reportedly examining ways to bring digital gold within a regulatory framework under commodity or securities laws. Once such guidelines are in place, digital gold could become a safer, mainstream investment avenue.
Until then, investors must stay alert, conduct due diligence, and prefer transparent, SEBI-approved gold products.
Official SEBI Sources on Digital Gold
For investors seeking verified information, always refer to SEBI’s official announcements. The Securities and Exchange Board of India (SEBI) regularly issues updates and warnings regarding unregulated financial products. You can visit the official SEBI website for authentic regulatory updates.
Recently, SEBI released an official press note cautioning the public against unregulated Digital Gold products — you can read the full update here: SEBI Press Release on Digital Gold (November 2025).
FAQ on Digital Gold
1. What is digital gold?
Digital gold is an online method of buying and storing gold through digital platforms, where your investment is backed by physical gold stored in vaults.
2. Is digital gold safe according to SEBI?
As per SEBI on digital gold, it is not a regulated product, so investors face higher risks. SEBI does not guarantee the authenticity or safety of digital gold.
3. Can I buy digital gold from SBI?
Yes, digital gold investment SBI is offered through trusted channels like MMTC-PAMP, which ensures physical gold backing. However, it is still outside SEBI’s regulatory purview.
4. What is the risk in digital gold investment?
The major risks include lack of regulation, counter-party default, and unclear storage audits. SEBI has warned investors to be cautious while investing in digital gold online.
5. What are SEBI-approved gold investment options?
SEBI recommends Gold ETFs, Electronic Gold Receipts (EGRs), and Sovereign Gold Bonds (SGBs) as safer alternatives with full regulatory oversight.
6. What should investors do now?
Until SEBI introduces formal regulation, invest only in regulated and transparent instruments. Avoid platforms that make unrealistic promises or lack clear storage and redemption details.
Final Words
The Digital Gold SEBI news is a clear reminder that not all online investment products are safe. While digital gold investment provides flexibility and small-ticket access, it remains unregulated and high-risk.
According to SEBI digital gold guidelines, investors should focus on secure, SEBI-registered options to protect their wealth. Convenience must never come at the cost of compliance and security.
Invest wisely — because in the digital era, awareness is your strongest protection.
