New Delhi, Nov 18 (NationPress) The recent announcement made by the Securities and Exchange Board of India (SEBI) regarding Digital Gold is a constructive and essential step that clarifies the dynamics of the digital marketplace while greatly enhancing consumer understanding of the product, as per experts.

SEBI recently cautioned investors about the risks associated with “digital gold” or e-gold products available on various online platforms, indicating that these offerings exist outside of the securities regulatory framework and pose considerable risks to investors.

The key clarification reinforces a well-established market norm: Digital Gold is not classified as securities or commodity derivatives by SEBI, as it functions entirely beyond the authority of the market regulator, akin to the direct purchase of physical gold or jewelry.

To comprehend the clarification, it is important to define the product: Digital Gold refers to 24-karat physical gold that is sold through digital channels in fractional amounts.

Importantly, every unit of digital gold bought by consumers on platforms such as PhonePe, Gpay, Paytm, Jar, Amazon, Mobikwik, Tanishq, and CaratLane is fully supported by an equivalent amount of physical gold. This gold is securely stored in bank-grade vaults and is fully insured.

Therefore, Digital Gold serves as a contemporary mechanism for acquiring and saving physical gold rather than being a virtual asset or a separate financial investment product like a Gold ETF or a market-regulated derivative. The SEBI notification clarifies and reinforces this important distinction, experts assert.

The credibility of Digital Gold relies entirely on the trustworthiness of the ecosystem partners. Gold sales on leading digital platforms (like PhonePe, Paytm, GPay, Amazon, etc.) are facilitated by major industry players such as MMTC-PAMP and SafeGold, both of which possess authorized bullion trading licenses.

These partnerships ensure the utmost level of trust through globally recognized practices:

Every gram purchased is 100% authentic, fully insured, and redeemable, reinforced by the seller's accredited operations. For instance, MMTC-PAMP is recognized as India’s only LBMA-accredited precious metals refiner.

All gold holdings are physically allocated in the customer’s name. This metal is stored in state-of-the-art secured and insured vaults under the supervision of an independent trustee for added customer protection, experts say.

Accounts are reconciled daily and independently verified through regular third-party audits, reflecting the rigorous self-regulatory frameworks adopted by sellers like MMTC-PAMP and SafeGold.

The capacity to save gold digitally democratizes access and provides a seamless savings instrument that is clearly different from a market-linked investment product.

The primary function of Digital Gold is to facilitate mobile-centric micro-savings. Its low entry point eliminates common barriers related to storage hassles or minimum purchase requirements, allowing for small, consistent savings.

This accessibility has led to a significant demographic transformation. While conventional gold purchases were mainly concentrated in the 35–55 years age group, digital platforms have witnessed a strong acceptance among the 18–35 years demographic, empowering younger consumers to begin building their savings early. The ability to monitor digital gold holdings, akin to checking a balance on a UPI app, makes saving both effortless and engaging.

Customers have various convenient options to redeem their gold savings, such as monetary transfer, physical delivery, or jewelry conversion.

The intersection of regulatory clarity and technological advancement highlights two crucial aspects of the Digital Gold ecosystem.

First, digital gold is unequivocally physical gold sold through a modern channel. The recent SEBI clarification reinforces this, affirming that it is a physical asset sale, not a regulated investment security.

“Secondly, the entire process is founded on unwavering authenticity and security. Every gram is 100% genuine, fully insured, stored in secure vaults, and subject to regular third-party audits, rendering Digital Gold one of the most reliable and seamless means for a new generation of Indians to secure a physical asset,” experts conclude.