New Delhi: The Securities and Exchange Board of India (SEBI) has issued an important warning for investors about digital gold investments. The market regulator said that many online platforms are offering digital gold to users, but these platforms do not fall under SEBI’s regulation.
According to SEBI, such platforms are outside its investor protection system, meaning that if any fraud happens or a company goes bankrupt, SEBI will not be able to help the investors.
SEBI Advice to Investors
SEBI has advised that those who wish to invest in gold digitally should choose Exchange-Traded Funds (ETFs) or Electronic Gold Receipts (EGRs) both of which are regulated and monitored by SEBI.
The regulator also made it clear that if investors use other unregulated platforms, SEBI will not be responsible for any loss.
What Does SEBI Do?
SEBI, or the Securities and Exchange Board of India, is the main body that ensures transparency and safety in India’s stock market and financial system. In simple terms, SEBI role is to protect investors from fraud by creating and enforcing strict market rules.
Gold and Indian Culture
Gold has always been a part of Indian tradition. It is not just an investment but an emotion passed down through generations.
When digital gold came into the market many people found it a convenient way to invest.
But what is digital gold?
It is simply gold in digital form not physical. Investors can buy, sell, or store it online. For every purchase an equal amount of real gold is stored safely in a vault by the company.The gold belongs to the investor but its security is managed by the company.
Benefits of Digital Gold
- You don’t have to worry about storing or keeping your gold safe.
- It’s easy to buy and sell digital gold online.
- You can also convert your digital gold into real gold, such as coins or bars, whenever you want.
However, these benefits come with risks if you invest through apps or websites that are not regulated.
Safe Ways to Invest in Gold
1. Gold ETFs (Exchange Traded Funds)
Gold ETFs allow you to invest in gold without actually owning it in physical form. These are traded on the stock exchange just like company shares.
As gold prices rise investors earn profits.
Each unit of a Gold ETF equals one gram of gold.
2. Gold Mutual Funds
Gold Mutual Funds are provided by Asset Management Companies (AMCs).You can invest in them either through a SIP (Systematic Investment Plan), where you invest a fixed amount regularly or by making a one time lump sum investment.
In these funds the fund manager invests in gold ETFs or related assets.
Both these options are regulated by SEBI making them safer.
Unregulated Platforms Offering Digital Gold
Many popular payment apps such as Google Pay, PhonePe, Paytm, DigiGold and e-Swarna offer the option to buy digital gold.
However SEBI has clarified that these platforms are not under its regulation.
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If these companies shut down or go bankrupt investors may lose their money or gold as there is no clear law or government protection for such cases. Currently there are no official rules to verify whether the stored gold actually exists or who audits it.
This is why SEBI has warned investors to be cautious while investing in digital gold through such platforms.
Conclusion
SEBI latest warning highlights that investors should be careful before choosing where to invest.
For safe and secure gold investments experts recommend sticking to regulated options like Gold ETFs & Electronic Gold Receipts instead of unregulated digital gold platforms.