In a follow-up to the recent warning by the SEBI on digital gold investments, the Indian Bullion and Jewelry Association (IBJA) has written to the financial sector regulator to bring digital gold sales under its regulatory framework.
The development comes days after SEBI had warned that investment in digital or E-gold is not regulated and there is no safety mechanism available, should anything go wrong.
The association, in its plea, wishes to dispel fears related to investing in digital gold, mostly through the mobile apps of popular payment service providers and online marketplaces.
According to Surendra Mehta, National Secretary, IBJA, “Many digital gold companies have approached us. They are interested in coming under the regulatory framework of SEBI. They are willing to be regulated by SEBI or any other regulator for that matter.”
Additionally, he added that although not regulated under SEBI, many of the gold products are backed by refiners approved by the Bureau of Indian Standards (BIS) and the National Accreditation Board for Testing and Calibration Laboratories (NABL), both government entities.
SEBI had warned that the Digital Gold products being sold online are different from SEBI-regulated gold instruments. Investors can alternatively invest in ETFs, which are SEBI-regulated.
Also Read: 10 Best Apps to Buy Gold Online (7th Will Surprise Every Investor)
Threefold Surge in Digital Gold Withdrawals
After the cautionary note by the SEBI, online digital gold-selling apps or platforms witnessed a threefold surge in withdrawals.
As SEBI highlighted that the practice is not yet regulated and retail investors must exercise caution, the investors might have resorted to panic selling.
However, In NetworkNews’ opinion, what is needed is an oversight mechanism. If the government knows that these products are being sold online, it should make rules and bring such platforms under its regulatory framework.
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