Sebi warned on digital gold in 2025; now physical backing and oversight in works
The Indian government and regulators are moving to bring the digital gold market under the joint supervision of the RBI and SEBI. This initiative aims to protect investors and prevent money laundering by requiring physical backing for digital gold products.
Why it matters
Increased regulation in the digital gold sector addresses risks associated with unregulated financial products and enhances market stability for retail investors.
Have you bought digital gold or are planning to? The Securities and Exchange Board of India had cautioned investors about digital gold in 2025. In a circular, Sebi said these products were distinct from gold products regulated by it because they were neither notified as securities nor classified as commodity derivatives. "They operate entirely outside the purview of Sebi," it said.Now, digital gold may come under the joint watch of the Reserve Bank of India and SEBI.Physical gold to back digital gold?The government is considering stricter regulations for digital gold, including a requirement that every unit be backed by physical bullion and a regulatory framework under the joint supervision of the Reserve Bank of India and the securities market regulator, according to an ET report.The finance ministry has sought feedback from regulators, banks and other stakeholders.
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