Teji Mandi Explains: All you need to know about digital gold ban

Teji MandiUpdated: Thursday, September 02, 2021, 06:43 PM IST
article-image
Representative Image | Photo: Pexels

Short Description- The Securities and Exchange Board of India (SEBI) has prohibited the sale of digital gold from September 10.

SEBI in its clear statement has mentioned that digital gold doesn’t come under the definition of ‘securities’. There are no regulations around digital gold. It is not regulated by SEBI. This rule will strictly apply to members of the stock exchanges like brokerage, wealth managers etc. Any company that deals with stocks, commodities, derivatives etc., will not be allowed to sell digital gold.

Who Is Allowed To Sell Digital Gold Then?

Any company that doesn’t deal directly with securities can offer digital gold. Basically, online payment services and mobile wallets like GooglePay and PhonePe can offer digital gold to their customers. These companies do not fall under the purview of SEBI and thus are allowed to offer the product. Only members of the stock exchange (BSE and NSE) are prohibited from distributing digital gold on their platforms.

What Should Investors Do?

Now individuals who earlier bought digital gold can sell it immediately. The physical delivery can be taken from the broker before September 10. Post that, investors will have to deal directly with the manufacturer of the product, that is MMTC-PAMP, Augmont or Digital Gold India Pvt. Ltd.

Closing Comments

Digital gold has gained immense popularity in recent years as investors can buy gold, even if it’s worth Rs 10. This has made it a favourite asset for investors. The prohibition of digital gold doesn’t mean one can’t invest in it. There are other companies that will continue to offer the service. However, until SEBI recognizes it as a ‘security’, it will be prohibited for all members of the stock exchange.

(To receive our E-paper on whatsapp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

RECENT STORIES

‘Offering students a wide range of additional courses to help them secure good jobs’

‘Offering students a wide range of additional courses to help them secure good jobs’

'Rupee is responding to market realities'

'Rupee is responding to market realities'

Qualcomm partners with Indian telecom firm to develop next-gen 5G outdoor smart cell

Qualcomm partners with Indian telecom firm to develop next-gen 5G outdoor smart cell

Sri Lankan Prez to visit India to find a way out of economic turmoil

Sri Lankan Prez to visit India to find a way out of economic turmoil

World Bank slashes India's growth forecast to 6.5% over global headwinds ahead

World Bank slashes India's growth forecast to 6.5% over global headwinds ahead