Millennials, Gen Z drive 50% surge as Indians buy 12 tonnes of digital gold worth Rs 16,670 crore despite Sebi caution

Industry estimates suggest that digital gold purchases stood at about 8 tonnes in 2024, underscoring the pace of growth this year.

• Digital gold investments in India rose nearly 50% in 2024, led by younger buyers
• Sebi warned investors that digital gold is not a regulated security
• IBJA to launch a self-regulatory body for digital gold platforms by early 2025

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India has witnessed a sharp rise in digital gold investments this year, with purchases climbing nearly 50% despite regulatory caution from the market watchdog. Data cited by The Economic Times, based on estimates from the World Gold Council (WGC), shows Indian investors-led largely by younger buyers-purchased around 12 tonnes of digital gold between January and November.

The estimate draws on transaction data released for the first time by the National Payments Corporation of India (NPCI), which tracks UPI-based digital gold purchases. At current Mumbai spot prices, this volume of 24-karat gold is valued at approximately Rs 16,670 crore. Industry estimates suggest that digital gold purchases stood at about 8 tonnes in 2024, underscoring the pace of growth this year.

Digital gold allows consumers to buy, sell and hold gold online without taking physical delivery, with investments starting from as little as Rs 1. This low entry barrier has made the product particularly popular among first-time investors, millennials and Gen Z users accessing gold through fintech platforms and mobile apps.

However, demand slowed after the Securities and Exchange Board of India (Sebi) issued an advisory in November cautioning investors that digital gold is not a regulated security and does not fall under existing commodity market regulations, unlike gold exchange-traded funds or electronic gold receipts. Sebi urged investors to carefully assess the risks before using such platforms.

Despite the regulatory warning, industry participants argue that digital gold is emerging as a transparent and efficient investment avenue. Sachin Jain, regional chief executive for India at the WGC, told The Economic Times that gold continues to be a core asset for Indian households, and digital formats improve accessibility through fractional ownership, market-linked pricing, and reduced concerns over storage and purity. He added that digitalisation would be key to keeping gold relevant for Indian consumers.

Leading players in the digital gold space include MMTC PAMP, Augmont and SafeGold, which store physical gold in secure vaults on behalf of customers. Investors can liquidate their holdings at any time through the platforms, providing ease of exit and liquidity.

The absence of formal regulation has prompted the India Bullion & Jewellers Association (IBJA) to initiate a self-regulatory organisation (SRO) for digital gold providers. The SRO is expected to begin onboarding members in January and will focus on periodic audits, ensuring full physical backing of digital holdings, and enforcing minimum net worth requirements for participating firms.

IBJA national secretary Surendra Mehta said the association is developing technology to onboard and oversee digital gold platforms, with regular audits aimed at building investor confidence. The framework is expected to be finalised by the end of March or early April next year, he told The Economic Times.

Industry executives noted that millennials and Gen Z account for nearly two-thirds of digital gold buyers, highlighting a broader shift toward digital-first investing. However, the Sebi advisory caused significant confusion in the market. A senior executive at a digital gold platform said purchases nearly stalled after the warning, forcing companies to actively reassure customers and bring them back to digital channels.