Digital Gold Thrives with 16,670 Crore Investment Despite SEBI Warning

With gold prices hitting all-time high, digital gold has become one of the most attractive investment avenues in India, despite the Securities and Exchange Board of India (SEBI) warning. In November, the Securities and Exchange Board of India in its notification had explained that digital gold investment has not been protected by any kind of rules. So, unlike gold exchange-traded funds or electronic gold receipts, digital gold does not fall under existing commodity market regulations.

Despite this, India has witnessed a significant jump in digital gold investment this year. Between January and November, investors purchased nearly 12 tonnes of digital gold. At current Mumbai market prices, this amount of 24-karat gold is worth about 16,670 crore rupees, a rise of almost 50 per cent compared to last year, when purchases stood at around 8 tonnes.

The figures come from estimates by the World Gold Council, based on transaction data shared for the first time by the National Payments Corporation of India. The corporation tracks payments made through UPI.

Why Digital Gold Glitters

Digital gold is a way for people to buy and hold gold online without physically taking it home. Buyers can start with very small amounts, even as little as 1 rupee. The companies offering the service store the gold safely. Investors can later sell their holdings or convert them into physical gold if they wish.

This easy entry point has made digital gold especially attractive to younger investors. Millennials and Gen Z users, who are more comfortable with mobile apps and fintech platforms, now make up nearly two-thirds of all buyers.

Expert's Opinion

Industry leaders believe digital gold is becoming an efficient and transparent way to invest. Sachin Jain, regional chief executive for India at the World Gold Council, said gold remains a central asset for Indian households, according to a report by the Economic Times.

He explained that digital formats make gold more accessible by allowing fractional ownership, linking prices directly to the market, and removing worries about storage and purity.

Major providers in this space include MMTC PAMP, Augmont, and SafeGold. These companies keep physical gold in secure vaults on behalf of customers. Investors can sell their holdings at any time, which gives them flexibility and liquidity.

To address the lack of formal regulation, the India Bullion & Jewellers Association is setting up a self-regulatory organisation. This body will begin enrolling members in January. The body will conduct routine audits to verify the physical backing of all digital gold sales. It will also require participating firms to meet minimum financial standards.

Surendra Mehta, national secretary of the association, said they are building technology to monitor digital gold platforms. He added that the framework should be ready by March or April next year.

Generational Shift in Investment Habits

Executives in the industry note that millennials and Gen Z are driving this change. Their preference for digital-first solutions is reshaping how gold is bought and sold in India. However, the Sebi advisory created confusion, and purchases nearly stopped for a time. Companies had to reassure customers and encourage them to return to digital channels.

The rise of digital gold shows how technology and generational habits are changing traditional investment patterns. While regulation remains uncertain, the demand from younger investors highlights the growing role of digital platforms in India's financial landscape.