India plans to introduce a formal regulatory framework for digital gold by next year, seeking to improve transparency, safeguard consumers, and standardise platform operations amid rapid growth in digital gold investments among young investors.
India is preparing to bring digital gold under a formal regulatory framework by next year, a move that would end years of uncertainty around a product that has grown rapidly with younger investors buying small amounts through UPI-linked apps. According to KNN India, the plan is aimed at improving transparency, tightening consumer safeguards and standardising how platforms operate.
At present, digital gold sits in a grey area. SEBI has said the product does not fall within its remit, while the RBI oversees only the payment rails used to make purchases, not the investment itself. A public caution from SEBI in November 2025 reinforced that position, and industry sources say the absence of a dedicated rulebook has left investors with uneven standards and limited recourse when disputes arise.
The proposed framework would require every gram, or fraction of a gram, sold digitally to be backed by an equivalent amount of physical gold held in insured vaults and checked through regular independent audits, according to the Economic Times as cited in the KNN report. It is also expected to set common disclosure rules covering storage, verification and redemption, giving buyers clearer information about what they own and how they can exit.
The government has been consulting the Finance Ministry, the RBI, the Ministry of Consumer Affairs and the Digital Precious Metals Assurance Council of India, a self-regulatory body formed this year by leading digital gold firms and fintech platforms. DPMACI says it was created to build trust, promote purity and transparency standards and provide a grievance redress mechanism for customers.
Officials believe the rules could help curb consumer complaints and align digital gold more closely with the oversight applied to gold exchange-traded funds and sovereign gold bonds. Industry players have broadly welcomed the prospect of formal regulation, arguing that it could lift confidence and create a fairer market while still leaving room for innovation. The government has not yet decided which regulator will take charge, and the final framework is still being worked out.
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