Digital Gold Boom: SEBI Warns Investors Amidst Soaring Popularity & Hidden Costs

• Digital gold saw 94.05 crore transactions worth over 12,471 crore by November, driven by easy investment and small entry amounts.
• Platforms like Paytm, PhonePe, and jewelers such as Kalyan Jewellers offer digital gold, storing physical gold in insured vaults with conversion options.
• SEBI cautioned investors, stating digital gold is unregulated, lacks transparency, and offers no regulatory protection unlike Gold ETFs or SGBs.
• Prices are not open-market determined; platforms adjust buy/sell spreads, leading to potentially poor selling prices for investors.
• Investors face multiple charges: 3% GST + platform margin on purchase, 2-3% spread on selling, and additional making/delivery fees + GST for physical conversion, plus capital gains tax.

Why It Matters: Digital gold offers easy access but comes with significant regulatory risks, hidden costs, and tax implications.