{"id":59006,"date":"2025-11-12T19:10:26","date_gmt":"2025-11-12T13:40:26","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=59006"},"modified":"2025-11-13T13:23:44","modified_gmt":"2025-11-13T07:53:44","slug":"sebi-digital-gold-warning","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/12-11-2025\/sebi-digital-gold-warning","title":{"rendered":"SEBI Warns Against Digital Gold Risks"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The <strong>Securities and Exchange Board of India (SEBI) <\/strong>has cautioned the general public <strong>against<\/strong> investing in <strong>digital gold and e-gold products.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The investment in digital gold has existed for several years, but <strong>there has been a surge in their popularity over the last one year.<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>The reasons include <\/strong>a steep rise in gold prices, combined with the convenience, and ease of owning gold digitally through online platforms.\u00a0<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>The digital gold products<strong> remain unregulated<\/strong> and do not fall under any regulatory ambit, <strong>exposing investors to heightened risks.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is Digital Gold?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Digital gold refers to <strong>buying gold without physically possessing<\/strong> the precious metal. The<strong> price<\/strong> of digital gold is linked to that of physical gold.\u00a0\u00a0<\/li>\n\n\n\n<li>Digital gold is created using <strong>blockchain technology.\u00a0<\/strong><\/li>\n\n\n\n<li>It allows investors to <strong>buy, sell and store gold electronically.<\/strong><\/li>\n\n\n\n<li><strong>Tax: <\/strong>In India, buying gold, whether physical or digital, usually attracts GST, though the exact rate for digital gold can vary depending on how the provider structures the product.\n<ul class=\"wp-block-list\">\n<li>When you sell digital gold, any profit is treated as a capital gain, and the tax rate depends on how long you have held it.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Pros of Investing in Digital Gold:\u00a0<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Digital gold is <strong>easy to access<\/strong> and allows one to<strong> sell it quickly<\/strong> in case of an emergency.\u00a0<\/li>\n\n\n\n<li>Unlike traditional gold purchases, digital gold\u00a0 allows investors to<strong> start investing with smaller amounts.\u00a0<\/strong><\/li>\n\n\n\n<li>It also <strong>eliminates the storage hassle,<\/strong> which is the biggest challenge associated with physical gold.\u00a0<\/li>\n\n\n\n<li>Digital gold allows investors <strong>to convert their investment into physical gold<\/strong> whenever required as it can be converted into coins, bars, or jewellery.<\/li>\n\n\n\n<li>Investing in digital gold <strong>does not require a demat account or margin deposits<\/strong>, making it a more convenient option.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Concerns Related Investing In Digital Gold<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Not regulated by SEBI or RBI.<\/li>\n\n\n\n<li>No guaranteed investor protection.<\/li>\n\n\n\n<li>Depends entirely on the company&#8217;s honesty and stability.<\/li>\n\n\n\n<li>Possible hidden fees (delivery, storage, or making charges).<\/li>\n\n\n\n<li>Limited legal recourse if something goes wrong.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why SEBI Has Cautioned Investors?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It has observed that<strong> several digital and online platforms<\/strong> are offering investors the facility to invest in digital gold or e-gold products.\n<ul class=\"wp-block-list\">\n<li><strong>Many jewellers from both the organised and unorganised sectors<\/strong> are providing opportunities for investment in digital gold.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>These products are neither notified as securities nor regulated as commodity derivatives.<\/li>\n\n\n\n<li>These gold products may entail significant risks for investors and may expose investors to counterparty and operational risks.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Recommendations of SEBI<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Investors should look at investing in gold products <strong>which are regulated by the Sebi to avoid any kind of risk.<\/strong><\/li>\n\n\n\n<li><strong>Various Sebi-regulated gold products are: <\/strong>SEBI advises investors to use regulated gold investment options such as Sovereign Gold Bonds (SGBs), Gold exchange-traded fund (ETF), Electronic Gold Receipts (EGRs), and commodity derivatives.\n<ul class=\"wp-block-list\">\n<li>Investments in these products can be made through <strong>Sebi-registered intermediaries<\/strong> and are <strong>governed by the regulatory framework <\/strong>prescribed by the markets regulator.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#ebecf0\"><tbody><tr><td><strong>Securities and Exchange Board of India (SEBI)<\/strong><br>&#8211; It is the <strong>regulatory authority<\/strong> for the securities and capital markets in India.<br>&#8211; It was established in <strong>1988 <\/strong>and given statutory powers through the SEBI Act of <strong>1992<\/strong>.<br>&#8211; SEBI&#8217;s primary goal is to protect the interests of investors, promote and regulate the securities market, and ensure its orderly functioning.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/sebi-warns-against-digital-gold-risks-involved-10358517\/\" target=\"_blank\" rel=\"noopener\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong>Context<\/strong><\/p>\n<li class=\"ms-5\">The Securities and Exchange Board of India (SEBI) has cautioned the general public against investing in digital gold and e-gold products.<\/li>\n<p><\/p>\n<p><strong>About<\/strong><\/p>\n<li class=\"ms-5\">The investment in digital gold has existed for several years, but there has been a surge in their popularity over the last one year.<\/li>\n<li class=\"ms-5\">The reasons include a steep rise in gold prices, combined with the convenience, and ease of owning gold digitally through online platforms.\u00a0<\/li>\n<li class=\"ms-5\">The digital gold products remain unregulated and do not fall under any regulatory ambit, exposing investors to heightened risks.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/12-11-2025\/sebi-digital-gold-warning\" class=\"btn btn-primary btn-sm float-end\">Read\u00a0More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-59006","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/59006","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=59006"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/59006\/revisions"}],"predecessor-version":[{"id":59047,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/59006\/revisions\/59047"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=59006"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=59006"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=59006"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}