News: SEBI has cautioned the public about rising investments in unregulated digital gold amid a surge in gold prices and online promotions.
About Digital Gold
- Digital gold refers to buying and owning gold electronically without physically holding the metal.
- Technology used : Digital gold is created using blockchain technology, which enables online buying, selling, and storing of gold.
- The value moves in line with physical gold prices.
- Benefits: Digital gold offers easy online access, small investment amounts, quick selling in emergencies, removal of storage hassles, and later conversion into coins, bars, or jewellery.
- Risks:
- It operates outside Sebi’s regulatory purview.
- It is neither a security nor regulated commodity derivative, carries counterparty and operational risks, offers no investor-protection mechanisms, and
- It depends on platforms or jewellers where default risk remains.
- SEBI’s Advisory to Investors: Investors should prefer gold investment options such as gold ETFs, exchange-traded commodity derivatives, EGRs, Sovereign Gold Bonds, or products available through Sebi-registered intermediaries.
