Digital gold: The new-age locker for an old-age asset

For decades, gold has been India’s favourite way to save money — trusted, tangible and culturally rooted. But today, instead of visiting a jeweller, many people are buying “digital gold” using just their phone.

Here’s what that really means:

What is digital gold?

Digital gold is real, physical gold stored securely in a vault, but you own it digitally. When you buy digital gold through apps like Paytm, PhonePe, Google Pay or Tanishq, you’re not buying a gold coin or ornament. You’re buying a fraction of actual gold stored by companies such as MMTC-PAMP, Augmont or SafeGold.

How to trade in digital gold

Buy small, anytime: You can start with as little as Rs 10. The platform buys equivalent gold on your behalf.

Stored safely: That gold is kept in insured vaults by the service provider.

Check live prices: Prices are linked to the real-time gold market, so they move with global gold rates.

Sell anytime: You can sell your gold digitally anytime, and the money is credited to your account instantly.

Convert to physical gold (optional): You can also get your digital gold delivered as coins or bars if you wish.

Benefits for common buyers

• No need to worry about theft or storage
• Easy to buy and sell online, 24/7
• Transparent pricing linked to global rates
• Minimum investment barrier is very low (Rs 1–Rs 10)

Points to remember

• No RBI regulation (yet): Digital gold is not regulated by RBI or SEBI. You must ensure you buy only from trusted platforms.
• Storage limit: Many providers allow storage for only 5 years, after that, you must sell or convert it.
• GST applicable: 3% GST is charged just like on physical gold.

From the economic & Civil Services perspective

What digital gold means for the economy

• Financial inclusion: Digital gold allows people in small towns and rural areas, who may not have access to financial markets, to invest easily in an appreciating asset. It democratises access to gold investment.
• Reduction in physical gold imports (potentially): If people prefer holding gold digitally, it could reduce physical demand — helping India manage its Current Account Deficit (CAD) since gold imports form a large part of it.
• Formalisation of gold savings: Digital gold brings traditionally informal household savings (often in cash or jewellery) into a traceable, organised channel. This supports transparency and taxation.
• Complement to Sovereign Gold Bonds (SGBs): Digital gold, while private, shares a similar goal with government schemes like SGBs, to digitise gold holdings and reduce physical imports. (SGB scheme has been discontinued now)
• Need for regulation: As investment volumes grow, the absence of SEBI or RBI regulation could pose risks related to fraud or mismanagement. Policymakers are considering a unified framework to govern such digital commodities.

Key takeaway

Digital gold makes owning gold as easy as a phone recharge, but remember, it’s still an investment product, not a magic wallet. For small savers, it’s a great start toward disciplined investing. For the economy, it’s a step toward digitising India’s age-old love for gold.