The SRO said that its first course of action would be to mandate all digital holdings to be backed by actual physical metal in a 1:1 ratio
The DPMACI also claims to be developing an ombudsman framework to resolve customer complaints within fixed timelines
This follows markets regulator SEBI earlier issuing an advisory in November, cautioning investors against unregulated digital gold platforms
India’s leading digital gold platforms have banded together to form a new self-regulatory organisation (SRO), called Digital Precious Metals Assurance Council of India (DPMACI).
To be chaired by think tank Policy Consensus Centre’s cofounder and CEO Nirupama Soundararajan, the SRO will comprise representatives from platforms such as PhonePe, BharatPe, MobiKwik, Gullak, Lenden Club and CRED. Its members will also include bullion providers like MMTC-PAMP and SafeGold.
In a statement, DPMACI said that it will look to institutionalise transparency and consumer protection in the rapidly growing market.
The DPMACI’s mandate will be to establish industry standards and engage with government and policy stakeholders on transparency, and accountability. The SRO said that its first course of action would be to establish strict operational guardrails and mandate all digital holdings to be backed by actual physical metal in a 1:1 ratio, conforming with global standards.
Additionally, members will be required to undergo periodic third-party audits to verify compliance with this requirement. The DPMACI also claims to be developing an ombudsman framework to resolve customer complaints within fixed timelines.
The development comes a day after PM Narendra Modi urged the country to stop purchasing gold in order to save forex reserves.
India’s Digital Gold Rush
Despite market volatility, currency swings and geopolitical tensions, gold has continued to be seen as a safe-haven asset. At the same time, rising prices have made physical gold harder to buy for many retail investors.
This has pushed more users towards digital gold platforms, which allow customers to buy gold in very small denominations without worrying about storage. The rise of UPI and instant digital payments has further accelerated adoption.
Users can buy gold worth as little as ₹10, making the product accessible to first-time and low-ticket investors. Reportedly, digital gold purchases hit a record high in January, with nearly 90% of transactions taking place via UPI.
Digital gold has also gained traction because it is simpler than regulated alternatives such as gold ETFs, exchange-traded commodity derivatives and Electronic Gold Receipts (EGRs). While those products require KYC, brokerage accounts and demat accounts, digital gold platforms offer a far more frictionless onboarding experience.
However, the sector continues to operate in a regulatory grey area.
In November last year, SEBI issued an advisory cautioning investors about digital gold platforms. The regulator noted that several platforms were marketing digital gold as an alternative to physical gold despite such products neither being recognised as securities nor regulated as commodity derivatives.
Meanwhile, earlier this year, Karnataka’s Crime Investigation Department (CID) searched the premises of fintech startup Jar over potential violations related to its gold storage practices. Per reports, the investigation focused on the startup’s custody structure and safeguards in place to protect customer assets.
This also comes in the backdrop of Prime Minister (PM) Narendra Modi recently urging Indians to avoid gold purchases as the country grapples with the economic fallout of the ongoing Iran-US war, surging crude oil prices and declining foreign exchange reserves.
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