Is Digital Gold Regulated in India? What the 2025 Advisory Means for Investors

The direct answer first: digital gold is legal to buy and sell in India, but as of now it is not regulated by any financial authority. On 8 November 2025, the securities market regulator issued a public caution (SEBI advisory) stating exactly this, and the question of is digital gold regulated in India now has an official answer: no. Three bodies come up whenever this topic is discussed, the securities market regulator, the central bank and the Ministry of Consumer Affairs, and this article explains where digital gold stands with each of them, what risks follow from the gap, and which gold products do carry proper oversight.

What the November 2025 Advisory Said About Digital Gold

The advisory was short and unambiguous. The securities market regulator noted that several online platforms were offering products branded as digital gold or e-gold, marketed as a convenient alternative to physical gold. It then clarified the legal position. These products are not notified as securities. They are not regulated as commodity derivatives either. So they sit entirely outside the regulator's framework.

The practical consequence is what matters for a buyer. Because the products are unregulated, the investor protection machinery of the securities market does not apply. There is no formal grievance redressal channel of the kind regulated investors use. There is no standardised, independently verified custody assurance for the vaulted metal. The buyer's safety rests entirely on the private platform's own practices. That was the regulator's warning, in plain terms: if it is not regulated, it is not protected.

Which Bodies Oversee Gold Investments in India, and Where Digital Gold Falls

India does not lack gold regulation. It lacks regulations for this particular wrapper. Three authorities cover the field, and digital gold slips between all three.

The Securities Market Regulator

This body regulates gold exchange traded funds, exchange-traded commodity derivatives and electronic gold receipts, all of which are legally securities or regulated contracts. Digital gold sebi regulation is the phrase people search for, but the position is that digital gold sold by online platforms is not notified as a security, so it falls outside this regulator's jurisdiction altogether. It supervises the regulated wrappers, not this one.

The Central Bank

The central bank's mandate covers banking, payment systems and foreign exchange. Digital gold is none of these things. It is not a deposit, not a payment instrument and not a foreign exchange product, so it does not fall under the central bank's direct oversight either. The platforms selling it are not licensed as banks or payment banks, and buying gold through an app does not bring the transaction inside the banking rulebook.

The Ministry of Consumer Affairs

General consumer protection law applies to digital gold platforms the way it applies to any seller of goods and services. A buyer who is misled or short-changed can pursue remedies through consumer forums. But that is generic protection. There is no sector-specific rule for digital gold platforms, no licensing requirement, and no authority conducting inspections of their vaults or audits of their holdings.

Put the three together and the summary writes itself: as of the November 2025 advisory, no single authority has issued sector-specific rules for digital gold platforms in India.

The Risks of Holding Unregulated Digital Gold

Unregulated does not automatically mean unsafe, but it does mean the buyer carries risks that regulated investors do not. Four stand out.

• Counterparty risk. The gold is held by a private company on your behalf. If that company fails, defaults or mismanages holdings, there is no compensation fund or statutory safety net behind it.
• Custody risk. There is no mandatory, standardised process verifying that the vaulted gold exists in the stated quantity and purity. You rely on the platform's own audits, where they exist.
• No formal redressal. Disputes cannot be taken to the securities market's grievance mechanisms. Consumer forums remain, but they are slower and general-purpose.
• Exit and pricing risk. Buy-sell spreads, redemption terms and storage charges are set by the platform, with no regulator reviewing whether they are fair.

An industry self-regulatory body, the Digital Precious Metals Assurance Council of India, was formed in May 2026 by major platforms to introduce voluntary standards such as audited 1:1 metal backing. It is a welcome step. It is still not statutory regulation.

Regulated Gold Options to Consider Instead

For buyers who want gold exposure with formal oversight, regulated routes exist within India’s financial framework.

Note: All figures are indicative. Actual amounts, fees, coverage percentages, and eligibility criteria may vary depending on the lender, borrower profile, loan category, and applicable guidelines at the time of application.

Physical gold has one further practical property the digital form lacks. Hallmarked jewellery and eligible coins may be pledged for a gold loan with regulated lenders, subject to applicable RBI guidelines. Digital gold is generally not accepted as collateral, as current RBI directions recognise only specific forms of physical gold for such lending.

Conclusion

Digital gold occupies an odd position in India: perfectly legal, widely sold, and watched over by no financial regulator. The November 2025 advisory did not ban it. It simply told buyers the truth about where the safety nets end. Anyone who continues to hold digital gold should know their platform's custody, audit and redemption terms in detail, because those terms are the only protection on offer. Anyone seeking gold with oversight has regulated routes in ETFs, EGRs and derivatives, and the oldest route of all, hallmarked physical gold, which carries the additional advantage that a regulated lender can accept it as collateral when the household needs funds.

Disclaimer : The information in this blog is for general purposes only and may change without notice. It does not constitute legal, tax, or financial advice. Readers should seek professional guidance and make decisions at their own discretion. IIFL Finance is not liable for any reliance on this content. Read more