Digital gold providers are implementing comprehensive transparency initiatives to address regulatory concerns and build investor confidence. According to reports from The Economic Times, some firms have appointed EY to audit their books and Grant Thornton India to conduct physical audits of their vaults. These measures represent part of the industry's broader efforts to establish self-regulation standards in the absence of formal regulatory oversight.
Leading digital gold players have established the Digital Precious Metals Assurance Council of India (DPMACI) to address transparency concerns. As reported by The Economic Times, the council includes major industry players such as SafeGold, MMTC Pamp and Augmont Gold. DPMACI has developed comprehensive standards ensuring that all consumer purchases are 100% backed by physical gold, with regular independent audits and grievance redressal mechanisms for consumers. The council has decided that all bullion sold must conform to recognised good delivery standards such as BIS or LBMA-certified benchmarks, with independent auditors conducting physical audits of vaulted bullion at least twice each year and including random destructive testing to verify stated weight and purity within agreed tolerance limits.
The India Bullion & Jewellers Association (IBJA) has also set up a self-regulatory division for the digital gold trade, as reported by The Economic Times. Surendra Mehta, national secretary of IBJA, confirmed that the association is engaging with members to discuss and decide the auditors for the sector. This multi-body approach demonstrates the industry's commitment to establishing robust self-regulatory standards across different industry organizations.
The digital gold sector has emerged as a mainstream investment product, serving 80 million customers across the country. According to The Economic Times, this growth comes despite recent regulatory challenges, as markets regulator Sebi observed in November that the sector is 'unregulated'. However, digital gold transactions remain robust on UPI platforms, indicating sustained investor interest in this accessible investment avenue. Digital gold remained among the higher-transacting categories on the Unified Payments Interface (UPI) in May, with transaction value of digital gold purchases through UPI falling 2% month on month to ₹24 billion ($256 million) and estimated volumes declining 5% to 1.54 tonnes, according to data from the World Gold Council.
The enhanced transparency measures are directly responding to regulatory scrutiny from market authorities. As reported by The Economic Times, a leading digital gold player stated that the appointment of auditors is part of addressing concerns over the lack of formal regulatory oversight. The industry's proactive approach demonstrates commitment to building trust and establishing credible standards in the absence of comprehensive regulatory framework. Bhargav Vaidya, an independent gold trade analyst, noted that for small/retail investors, digital gold is at par with buying a gold bar or investing through local jewellers, emphasizing that it is important that one looks at the credibility of the company before investing.
