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Sale Of Digital Gold May Suffer Due To SEBI Guidelines

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Fintech platforms that engage in or enable the acquisition of digital gold face new challenges, as the National Stock Exchange (NSE) have issued a circular ordering all members, including stockbrokers and wealth managers, to halt digital gold sales on their platforms by September 10.

 
Sale Of Digital Gold May Suffer Due To SEBI Guidelines

The declaration came after SEBI, the market regulator, declared digital gold sales a violation of the Securities Contracts (Regulation) Rules (SCCR) of 1957, as per the reports.

Digital gold is a virtual approach to invest in gold without having to worry about the cost of storage or the quality of the gold. A user can even invest as little as INR 100 and retain a fraction of virtual gold, which is not conceivable with physical gold, which is sold by the gram or carat.

It should be emphasized, however, that the circular issued by the NSE is only relevant to its members. The new legislation would not affect applications like Google Pay and PhonePe that allow users to invest in virtual gold.

SEBI's approach, according to Deepak Abbot of Indiagold, a firm that provides gold loans, could indicate that the digital gold market would be regulated.

The aforementioned restriction is likely to stifle the digital gold market, which was projected to grow over the upcoming festival season when Indians love to buy gold as a symbol of prosperity and good fortune.

Read more about: gold digital gold
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