PhonePe CEO Sameer Nigam clarifies Digital Gold is physical gold sold digitally, not crypto. It’s a popular savings tool due to affordability (from Re 1), secure vaulting, instant liquidity, and 1:1 backing by audited physical gold.
What Sets Digital Gold Apart?
Unlike traditional online jewellery purchases from brands such as Tanishq or CaratLane, where gold is shipped to the buyer immediately, Digital Gold purchased from platforms like MMTC-PAMP or SafeGold is held in secure vaults until customers request delivery. “Every purchase comes with a formal tax invoice and a gold ownership certificate, mirroring the experience of buying gold in a physical store.”
Ensuring Quality and Regulation
According to Nigam, leading Digital Gold providers offer 99.9% or 99.5% purity gold comparable to Gold ETFs and undergo regular independent audits to ensure that every digital purchase is backed 1:1 by physical gold. With the sector still largely unregulated, he notes that the recent move by industry players to establish a self-regulatory organisation (SRO) is a crucial step towards strengthening audits, enforcing quality standards, and improving consumer protection.
Digital Gold vs Gold ETFs: The GST Factor
Nigam further highlighted that the Digital Gold attracts a 3% GST at purchase, the same as physical gold bought from jewellers. “Gold ETFs, by contrast, don’t incur GST since they cannot be redeemed for physical gold.”
Key Drivers of Adoption
Nigam attributes the surge in adoption to several factors, including affordability and flexibility. Digital Gold enables fractional buying, allowing consumers to purchase gold starting from as little as Rs 1, with typical order values ranging between Rs 1,000 and Rs 3,000, amounts insufficient to buy even 0.1 grams of physical gold offline. Daily gold-saving plans, starting at Rs 10 per day, have quickly become the category’s most popular product, helping Indians cultivate a daily savings habit.Other drivers include secure vault storage, which removes the need for home safekeeping, and instant online liquidity, enabling users to sell their gold anytime without visiting a jewellery store.
The Road Ahead
As Digital Gold adoption continues to grow across the country, Nigam says stronger governance and standardised best practices will be essential to maintaining trust in the fast-evolving category. (ANI)(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)