New Delhi. Till just a few months ago, people were investing a lot of money in digital gold. Open the mobile app, make payment through UPI in one click and the gold is deposited in your digital wallet. Now the picture has completely changed after SEBI raised question mark on this method of buying gold without a jewelery shop. As soon as SEBI warned that digital gold is not regulated by any institution in India, people started avoiding digital gold.
Latest data from National Payments Corporation of India (NPCI) shows that there was a huge decline of 61% in the purchase of digital gold through UPI in October. While digital gold worth ₹ 1,410 crore was purchased in September, in October this figure came down to only ₹ 550 crore. This is the lowest level of digital gold purchase of the year. The average for 2025 has also been ₹951 crore, which is much better than this time’s performance. That is, it is clear that the questions raised on trust made people step back.
UPI is the biggest means of digital purchase
UPI is the biggest way to buy digital gold. Lakhs of people in the country used to buy small and big amounts of gold every day on apps like Paytm, PhonePe, Google Pay, Amazon Pay and Jar. This market was growing at such a fast pace that sales directly doubled from ₹762 crore in January to ₹1,410 crore in September. But as fast as this trend had gone up, it also came down at the same pace in October.
Uncertainty gave a shock
SEBI openly said that digital gold does not fall in any regulated investment category. Here, many influencers on social media warned that if someday the platform selling digital gold stops working, it may be difficult for customers to withdraw their money or gold. The impact of these warnings was directly visible on people’s confidence. While there were more than 10 crore digital gold transactions in August and September, this number came down to only 2.1 crore in October. That means a decline of about 80%.
Sales could not increase even during the festive season
Interestingly, Dhanteras was also in October and generally people buy gold on a large scale on this auspicious day. If this controversy had not arisen, this month could have proved to be the biggest opportunity of the year for digital gold companies. But, regulatory uncertainty over digital gold has diminished its attractiveness.
What is digital gold?
Digital Gold is actually a scheme in which you buy gold virtually by paying money. The platforms claim that they store the same amount of physical gold in their vaults. If you want, instead of withdrawing money, you can also take physical gold delivery. Most people consider it an easy way to make small investments, because one can start with an amount of Re 1 or less.
Apart from this, hidden charges in digital gold also have a direct impact on the returns of investors. Many platforms charge different types of fees in the name of storage, insurance and checking the purity of gold. This information is often hidden in fine print, which most people do not read. The result is that the actual profit at the time of buying and selling remains much less than expected.
What is the return on digital gold?
Returns on digital gold are based on the market price (spot price) of gold, as it is a digital form of 99.99% pure gold. There is no additional interest or dividend in this. Returns come entirely from fluctuations in the price of gold. It works in the same way as physical gold, but the actual returns may be lower due to the charges imposed by the platform (like Paytm, Groww).
