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The trend of investing in digital gold is increasing rapidly. But Sebi has warned investors about its danger. It has been said that it does not come under any regulatory scope, hence the risk in it is high.
Mumbai. Digital gold is such an online medium through which people can buy gold for Rs 10 or even Rs 100. This facility is available through apps like Paytm, Google Pay and PhonePe, which provide this service in partnership with companies like MMTC-PAMP and Augmont. Companies claim that real gold equal to the gold purchased is kept safe in their vaults. This method became popular among the youth because there is no need to go to a jeweler and investment is possible even with small amounts.
Sebi’s warning: No rules, no monitoring
Sebi has clarified that digital gold does not come under any official rules. This is neither a security, nor a deposit, nor a derivative, hence Sebi does not keep any watch on these platforms. This means that if a company or app is closed then the investor will not have any legal protection. Experts say that this is the biggest danger, because sometimes it is not even decided whether the vault in which the gold is being said is actually present or not.
What is the safe path for investors?
Experts have advised that investors convert their digital gold into regulated products like Gold ETF or Electronic Gold Receipts. These products are monitored by SEBI and the interests of investors are ensured. Ayeshwari Gupta of Polygon Labs says that this step of Sebi is the first step towards controlling ‘grey zone’ digital products. He said that soon a new regulatory framework for tokenized assets may come in India, which will make digital investment safe and transparent.
Way forward: Be aware, stay safe
Sebi has not banned digital gold, but has definitely given a warning. This means that the investor has to understand where he is investing his money. Until there is clear regulation on digital gold, transparent and safe options like Gold ETFs are better. Only wise investment can give benefits like gold in the long run.
