Finance Ministry today announced that the RBI and SEBI will jointly regulate digital gold, mandating that each unit be backed by physical bullion— a direct response to a 2025 Sebi warning that such products operated outside any regulatory purview.
The digital gold market, valued at roughly $3 billion, sees average transactions of just Rs 100, yet it has drawn criticism for its lack of investor protection and the risk of money‑laundering through unregulated operators.
Industry voices echo the call for oversight. Samit Guha, MD of MMTC‑PAMP, said the Digital Precious Metals Assurance Council of India—featuring players like PhonePe and CRED—aims to standardise processes and safeguard customers. A bank executive, who wished to remain anonymous, noted that the absence of regulation has allowed “fly‑by‑night” operators to surface.
The joint RBI‑SEBI supervision is expected to eliminate regulatory arbitrage, provide a clear dispute‑resolution mechanism, and assure investors that their gold holdings are physically backed.
The finance ministry is now seeking feedback from regulators, banks and other stakeholders, with a draft framework slated for a parliamentary hearing in the next session.