Digital gold has become a popular choice for many people especially the young investors, as people thought buying real gold and keeping it safe create more distress. But in SEBI,s recent news it states that most digital gold products being sold online are not regulated by any official authority, it also state that investors don’t get the usual protections they might expect from the product.
According to SEBI, a lot of platforms are offering gold in a way that does not fell under its securities. If something does happens with the E-gold holding Company then the investors gold will disappear and their will no one who can help investors. SEBI’s message is simple “Know where you are investing your money” because not everything that looks safe online is actually backed by regulation.
SEBI Digital Gold Warning:
The securities and exchange board of India(SEBI) has issued a public advisory warning against investment in “Digital Gold” this so-called product regulated through various websites and apps. Also states that such digital gold products are neither notified nor regulated as commodity derivatives.
Regulated alternatives to Digital Gold:
In SEBI’s advisory titled “caution to public regarding dealing in Digital Gold”, it also states that “SEBI has enabled investments involved in gold and gold regulated instruments through various SEBI regulated gold products”.
These are exchange traded commodity derivative contracts, Gold Exchange Traded Funds(ETFs) offered by Mutual Funds and Electronic Gold receipts(EGRs) tradeable on stock exchange.
Exchange-traded derivative contracts:
These are financial contracts underlying assets like stocks, currencies, or indices. These are standardized futures and stock options contract that are bought and sold on a formal exchange.
Gold Exchange Traded Funds:
Gold ETF is a type of investment fund that traces the price of gold, it allows you to buy gold without physically buying or storing it. This is a Dematerialized form of gold. Gold ETFs are created and managed by Mutual Fund companies (AMCs like SBI, HDFC, Nippon, ICICI, etc.). Gold ETFs are not affected by the stock market or other mutual fund schemes instead they are affected by international gold price, Rupee, Dollar exchange, costs, demand and supply on the exchange.
Gold ETFS behaves entirely like pure gold.
Where and How to invest:
SEBI further stated that “investments in these SEBI regulated gold products can be made through SEBI registered intermediaries and governed by the regulatory framework prescribed by SEBI”
Why Digital Gold was banned by SEBI:
SEBI the market regulator detect the potential dangers of investment in unauthorized instruments advising that “Digital Gold’ operate entirely outside the preview of SEBI”. It also warns such digital gold products may entail significant risks for investors and may expose investors to counter party and operational risks”.
Risks for the Investors/participants in Digital Gold:
It further made aware that “None of the investor protection mechanisms under securities market purview shall be available for investments in such Digital gold products”
In Conclusion,
At the end of the day; SEBI’s message is straight forward: be careful with digital gold. It may look convenient, modern and easy to buy but many this products are still outside any regulatory protection. And when there’s no one to regularly watch for your money the risk automatically go up.
SEBI’s warning isn’t meant to scare anyone; it also has given information where to invest instead of real gold.
#sebi #digitalgold #goldetfs #digitalgoldwarning
Real Report:
SEBI | Caution to public regarding dealing in ‘Digital Gold’
Related Posts:
1)HDFC bank Millenia Credit card:HDFC Bank Millennia Credit Card Review 2025: Benefits, Cashback, Fees & Smart Usage Tips – Merchant Blogger
2)HDFC bank Freedom Credit card:The Ultimate Guide to HDFC Bank Freedom Credit Card-Entry level, Beginner Freindly-2025 – Merchant Blogger