Digital Gold rules may get stricter as the government considers bringing the fast-growing investment product under a formal regulatory framework.
The proposed changes could require every digital gold unit to be backed by physical gold.
The Finance Ministry has sought views from regulators, banks and other stakeholders on the issue.
According to reports, discussions include recognising digital gold as a security under the Securities Contracts (Regulation) Act, 1956.
Digital Gold Rules May Bring RBI and SEBI Oversight
One proposal under discussion is joint regulatory oversight involving the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).
However, the final framework and the exact responsibilities of each regulator have not yet been decided.
The proposed framework could also introduce stronger requirements for storage, audits and record-keeping.
Compliance measures related to customer funds, physical gold holdings and prevention of money laundering may also become more stringent.
Every Digital Gold Unit Could Need Physical Backing
A key proposal is to ensure that every unit of digital gold sold to customers is backed by corresponding physical bullion.
The objective would be to establish that the gold represented on a platform is actually held securely.
For customers, this could mean greater transparency about the physical gold backing their digital holdings.
However, the final requirements will depend on the regulations eventually approved by the government and relevant regulators.
Digital gold has become popular because customers can purchase very small quantities through mobile apps and online platforms.
Purchases can start with amounts such as ₹10, ₹50 or ₹100.
SEBI Had Earlier Warned About Digital Gold
SEBI had cautioned investors about digital gold in November 2025.
The regulator said such digital gold or e-gold products were different from SEBI-regulated gold products such as Gold ETFs, electronic gold receipts and exchange-traded commodity derivatives.
SEBI also stated that these digital gold products were not notified as securities or regulated as commodity derivatives and operated outside its regulatory framework.
It warned that investors could face counterparty and operational risks.
What the New Rules Could Mean for Buyers
If a formal regulatory framework is introduced, digital gold companies could face clearer requirements covering custody, verification, audits and customer protection.
Stronger oversight could also change how these platforms operate.
However, tighter compliance could increase operating costs for companies.
Depending on how those costs are passed on, customers could potentially see changes in buying, selling or storage-related charges.
The digital gold market is estimated by industry sources to manage assets worth around $3 billion, making the regulatory discussions significant for a large number of small-ticket buyers.
For now, the proposals are still under discussion.
Customers should distinguish between digital gold and SEBI-regulated gold investment products, as the regulatory protections available to them are not currently the same.
