On 8th November 2025, SEBI had released circular that provides caution to public regarding Digital Gold. The contents of the circular have been translated by many influencers, finfluencers, online experts, financial advisors and there has been some reaction in the market due to the same. We at eBullion believe in providing utmost transparency about our platform and offerings. We are planning to provide as much clarity as possible to enable customers to take an informed purchase, sale and related investment decisions.
First things first, the SEBI circular states that Digital Gold is not regulated by them. Does unregulated mean illegal? Long answer short - It does not. SEBI is an organization which regulates securities, derivative contracts and such and there are mechanisms to list such products on Platforms / exchanges and trade or invest in those. One of the primary inferences to derive from the circular is that Digital Gold is not a security or a derivative contract and hence not regulated by SEBI.
Then what is Digital Gold? How to trust or who to trust when it comes to Digital Gold? If not SEBI, who should regulate Digital Gold? These are valid questions to ask and we intend to provide as much information as possible on these aspects.
In the current state, we can say that Digital Gold is providing an alternative to a customer who otherwise maybe approaching a jeweller to buy a bullion bar or a coin. The Digital Gold Product fractionalizes larger bars of highest purity (99.99% purity Gold and Silver on most platforms and 99.95% purity Platinum and Palladium) and helps investors own a fraction of these. The customers have ownership of these fractional quantities. As in, if a Digital Gold customer has bought 0.1 gram of Digital Gold and they have been allocated 0.1 gram against bar No 1234 staying in XYZ vault, they have an ownership of this 0.1 gram. The internal mechanisms of the Digital Gold platforms (if followed as per unstated norms of the industry) should ensure that the vault keeper / custodian recognizes such bars as owned by the pool of customers to whom the bar has been allocated and in an eventuality of the Digital Platform suspending operations and other such events, the proceedings from the sale of such bars is given back to the retail customers owning the fractions.
How to evaluate whom to trust in Digital Gold? In the current state, the customers are recommended to do their own research on the platforms and take an informed decision. A vital question to ask: If I am buying Digital Gold from a FinTech platform, an NBFC platform, or any other digital app or website, are they providing the service directly, or is there a provider fulfilling the allocation in the background? The Digital Gold providers distribute Digital Gold through such platforms. Research about the Digital Gold provider, try to understand the mechanism through which the vaulting and custody of customer holdings are protected. There are at least some players in the Digital Gold market who try their best to provide as much trust to their customers as possible. The fact that this industry is waiting for regulations to come in pushes these players to play as safe as possible. As an industry, there can be various players with different motivations. The professional players are actively seeking regulations to ensure customers' doubts are addressed as much as possible.
If not SEBI, who should regulate Digital Gold? The industry might be heading towards forming a Self Regulatory Organization (SRO) which would lay down the practices to ensure safeguarding of customers' interests and if possible a grievance redressal mechanism. The current thought in some quarters of the industry is to form such an SRO and ensure enhanced transparency and reliability to the customers and gradually inch towards obtaining recognition of the SRO by relevant authorities.
In the meantime, unregulated does not translate to illegal. Trust is built in different ways to customers in different industries. As new age Technological developments increase the possibilities of introducing novel products and services to customers, regulations evolve keeping in mind the higher level objective of good business, customer interests and fair markets.
As we move forward, we will be publishing more details on the safeguards in place at eBullion - escrow mechanism, vaulting, insurance, custodian, third party verifications, physical audits, cyber security, fraud checks etc. We at eBullion continuously strive towards transparency, trust and customer satisfaction and will keep publishing our research, commentary and practices that can address doubts in these areas.
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