Is Buying Digital Gold Legal in India?
For the longest time, gold has been regarded as a type of investment that delivers acceptable returns, diversification, and hedging properties. The yellow metal is especially important in India, which, according to the World Gold Council, is one of the major gold markets.
Do you know? According to an ICRA report, gold jewellery demand will increase by 11% year over year in FY 2023. In the digital age, practically every type of investment, traditional or otherwise, is at our fingertips. Electronic media has increased accessibility, speed, and convenience while also opening up new options for innovation. As a result of the digitisation era, the concept of "digital gold" has evolved as a tool for both investors and consumers to purchase gold digitally.
Although an innovative concept, there appears to be a void in the regulatory framework surrounding digital gold, which is still in the early stages of development.
This article will discuss the concept of digital gold as well as the legal frameworks that surround it.
Buying & Selling of Digital Gold
Digital gold is a financial tool that allows people to invest in gold electronically. When a customer invests in digital gold, the platform stores an equal amount of real gold in vaults. A buyer has the choice of either receiving physical gold or selling digital gold at the current market rate at any moment.
MMTC PAMP, Augmont Goldtech, and Digital Gold India are the three most important entities selling digital gold in India (SafeGold). These companies offer digital gold through partnerships with a variety of financial service providers, including Paytm, Google Pay, Amazon Pay, and PhonePe. Well-known micro-investing apps, such as Spare8, also provide opportunities for gold investments through similar third-party partnerships.
Due to its ease of availability and low cost (investment in digital gold starts at Re 1 and can go up to any denomination), gold investments have been a popular choice among investors. However, if you are wondering how to begin your micro-investment journey in buying gold online and its legal implications, read on.
How to Easily Start Investing in Digital Gold?
You may start buying gold online quickly and easily with the Spare8 micro-investment app.
Get the Spare8 app from the Google Play Store and install it.
To log in, simply provide your name and phone number after installing the app.
Next, connect your Spare8 account to your digital wallets, such as GPay, PhonePe, or another digital payment method.
From now on, whenever you deal digitally using digital payment methods, the value will be rounded up to the nearest ₹10, and any leftover change will be immediately deposited in digital gold.
Legal Aspect of Gold Investments
The appearance of digital gold as an innovative product and a new revenue source for stock brokers across the country proved to be a wake-up call for the securities market regulator. As it turns out, there is no regulatory framework in place for digital gold. In the absence of a regulatory organisation, the question that arises is whether digital gold is lawful at all.
The fact that it is fully legal to buy or sell gold through digital payment methods gives credibility to the legality of digital gold.
If the same set of activities could be carried out physically and legally (including the purchase, sale, and delivery of the yellow metal), then the fact that the transaction is carried out digitally does not negate its legality. The aforementioned position is supported by the statement that purchasing digital gold is no different than purchasing physical gold and paying for it with digital means.
However, there is still ambiguity in the digital gold market because there is no specific regulatory body overseeing the mechanism of buying, selling, and receiving digital gold on the government's end. However, the prominent entities selling digital gold in India—Augmont Goldtech, MMTC PAMP, and Digital Gold India (SafeGold)—along with platforms like Spare8, are trusted and valued. With rising popularity, it’s expected that the government will appoint a regulatory body soon to avoid this issue.
Why Digital Gold is the Best Option
Digital gold is the finest alternative for non-technical individuals because the process is much easier and the cost of saving and earning is much higher. The following are some of the reasons why you should start gold investments:
No KYC: No unneeded, lengthy KYC processes. You only need to supply some basic information.
No fixed costs: You can begin with ₹1 and invest as much as you like.
No lock-in term: You can invest today and withdraw tomorrow.
Guaranteed purity, safety, and security: Spare8 has partnered with Augmont and Paytm to purchase digital gold and keep it in secure vaults.
Conclusion
It is an excellent and straightforward alternative to start buying gold online with only a few simple steps. The organisations involved are trustworthy, and you should not be concerned. Digital gold investments in India are fully legal, and with the growing popularity, a regulatory body will be appointed shortly.
Don't put off your investment journey—begin it as soon as possible by installing the Spare8 app.