Actual gold too hot to handle, buyers turn to digital

Amid the historic rally of gold prices, and fuelled by an increasing interest among the younger population and first-time investors, digital gold is gaining popularity across India. While exact figures vary across platforms, surveys estimate that millions of Indians are already investing in digital gold, and this number is growing steadily every year.

“With increased smartphone usage, UPI integration, and growing financial awareness, we expect digital gold adoption to double in the coming years,” said Samit Guha, chief financial and technology Officer of MMTC-PAMP, a joint venture between the Centre-owned Metals and Minerals Trading Corporation of India (MMTC) and Switzerland-based gold refining firm, Produits Artistiques Métaux Précieux (PAMP).

As per estimates of the World Gold Council (WGC) and homegrown digital gold platform SafeGold, of the approximately Rs 1.5 lakh crore gold investments made in India in 2024, Rs 13,888 crore (about 9.7%) were for digital gold. “Digital gold has seen huge growth on the back of overall global uncertainty and market turbulence since 2022,” said Rhea Chaterji, director and head of consumer retail, SafeGold.

“Gold (overall) also outshone every asset class in 2024 with returns of over 21%, and a further 25% in 2025 YTD,” added Chaterji.

SafeGold boasts over 55 million customers across its own platform as well as its banking, fintech and consumer partners like Axis Bank, PhonePe, Amazon, Tanishq, and Jio Financial Services, among others. “We also have international operations in the UAE with Liv, and in Thailand with TrueMoney and others. We did over Rs 6,500 crore revenue in the previous financial year,” added Chaterji.

As per reports, customers can buy digital gold through about 100 apps operating currently, including those of jewellers, but the backend operations are managed by only a handful of institutions like MMTC-PAMP, SafeGold and Augmont. These platforms store the real, physical gold, which back the digital gold that customers invest, in highly secure vaults.

But why is digital gold becoming so popular? “Customers can buy from Rs 10 and choose to sell their gold at any time, opt for delivery of a coin (0.5 gm and above) or lease their gold for yield. We have a small mark-up of ~2.6% built into the purchase price, which keeps our gold rates the most competitively priced for 24K 99.99 gold,” said Chatterji of SafeGold.

According to Guha of MMTC-PAMP, digital gold offers the best of both worlds – traditional trust in gold and modern convenience through apps and online platforms. “With just a few clicks, people can now start investing in 24K gold. At MMTC-PAMP, we proudly offer our customers 99.99%+ purest gold, backed by Swiss craftsmanship and positive weight tolerance,” he added.

Leading this shift to digital is the younger population. As per a survey conducted by Moneyview, a fintech company, in October last year, as many as 65% of millennial respondents said they preferred digital gold over physical gold. At least 75% of the respondents under 35 years favoured digital gold, citing liquidity and convenience, the survey noted.

There is a word of caution, though. While physical gold is regulated by standard gold markets, digital gold is not yet fully regulated by the government. This means there might be risks if the provider shuts down or faces legal issues. “It’s a risky product with no regulation and regulator. Investors need to be extra cautious before investing. If the government effects any regulation, investors might get surprised with their investment,” said a spokesperson of the India Bullion and Jewellers Association.

However, digital gold providers allay any such fears. “While questions around safety and regulation are natural in any growing industry, the key lies in choosing a credible and transparent provider. At MMTC-PAMP, every rupee of digital gold is backed by 24K 99.99%+ purest gold, securely stored in our security vaults. As the only London Bullion Market Association (LBMA)-accredited precious metals refinery in India, we ensure globally certified quality and purity,” said Guha of MMTC-PAMP.

According to Chaterji, SafeGold follows the World Gold Council’s Internet Gold Standards, and has created an entire framework around protecting customer gold and keeping it safe. Its gold is stored in a vault managed by Brinks (the world leaders in the space), with Vistra Corporate Services acting as a trustee administrator to provide oversight and safeguard customer interests.

“Even in the absence of a regulatory framework, our customers can be sure of every rupee worth of gold bought at SafeGold, and we are unique even among other digital gold platforms, in having daily level checks. Overall, we look forward to working with any future regulation in respect of digital gold and are confident that our standards are best in class,” added Chaterji.