Digital gold firms urge Sebi to regulate fast-growing sector

As digital gold continues to gain momentum—particularly among young, tech-savvy investors—concerns around safety, transparency and regulatory oversight are becoming more prominent. In response, leading industry bodies and major digital gold platforms have formally urged the Securities and Exchange Board of India (Sebi) to bring the category under a dedicated regulatory framework.

Industry Push for Clear Rules Amid Growing Consumer Adoption

The India Bullion & Jewellers Association (IBJA) has written to Sebi requesting that digital gold providers be regulated either by the market watchdog or another suitable authority. The aim, the association said, is to strengthen consumer confidence in a rapidly expanding segment that currently lacks defined protections.

According to the Economic Times report, the request was submitted on November 11. IBJA national secretary Surendra Mehta confirmed that several digital gold platforms themselves are seeking formal supervision to ensure customers feel assured about the legitimacy and safety of their purchases.

Mehta added that many digital gold offerings today are backed by refiners accredited by the Bureau of Indian Standards (BIS) and the National Accreditation Board for Testing and Calibration Laboratories (NABL), but a unified regulatory framework is still missing.

Sebi’s Recent Warning Sparks Fresh Industry Action

The appeal follows Sebi’s recent clarification that digital gold products do not fall under its jurisdiction. The regulator noted that these offerings are neither classified as securities nor as commodity derivatives. As a result, they do not receive the regulatory safeguards that cover gold ETFs, electronic gold receipts (EGRs) or exchange-traded commodity derivatives.

The absence of oversight has raised concerns at a time when digital gold purchases—especially small-ticket buys during festive seasons and online sales events—have sharply increased.

A Fast-Growing Market Seeking Stronger Consumer Protection

Digital gold has become popular due to instant liquidity, transparent pricing, and the ability to purchase in very small denominations. But without a regulatory mechanism, investors face uncertainty over storage assurance, purity guarantees and dispute resolution.

Industry stakeholders believe that bringing digital gold platforms under Sebi or another central regulator will boost credibility and safeguard retail investors as the market expands.