Kolkata: The India Bullion & Jewellers Association (IBJA) has written to Sebi, urging the markets regulator to bring digital gold providers under its ambit or any other formal regulator, saying the move could dispel fears that consumers are being duped.
The appeal by the bullion lobby follows Sebi‘s recent caution that digital gold platforms operate outside its jurisdiction, even as the product sees increased buying among younger investors who want instant liquidity and zero locker costs.
“We have been approached by various digital gold companies and they have shown their willingness to be regulated either through Sebi or any other regulator as suggested by the market watchdog,” IBJA’s national secretary Surendra Mehta said.
Several digital gold products are backed by refiners approved by the Bureau of Indian Standards (BIS) and the National Accreditation Board for Testing and Calibration Laboratories (NABL), he noted.
In a letter to Sebi dated November 11, IBJA said that regulation could help dispel fears that customers are being misled by digital gold providers.
ET reviewed the letter.
Last week, Sebi warned investors that digital gold products are neither regulated as securities nor as commodity derivatives and such products fall outside its jurisdiction and do not benefit from investor-protection mechanisms available for Sebi-regulated gold instruments such as gold ETFs, electronic gold receipts, or exchange-traded derivatives.
“There should be more clarity from the government on digital gold,” said Gaurav Mathur, founder and CEO of digital gold platform SafeGold, which partners with jewellery brand Tanishq. “The government should put in place a surveillance system to monitor whether gold purchased through these platforms is being kept in the vaults and that gold can only be liquidated if the consumer wants.”
Digital gold has gained traction among younger buyers, with the segment expanding sharply during festivals and shopping events.
SafeGold reported transactions worth ₹1,950 crore during this year’s Dhanteras, up from ₹800 crore last year.
