Buying Digital Gold This Dhanteras? SEBI Warning In Focus As Market Could Hit $170 Billion By 2031
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Digital gold is gaining attention during the festive gold-buying season as the World Gold Council expects the global market to grow to $160–170 billion by 2031. But for Indian investors buying digital gold, SEBI's warning remains important: certain digital gold and e-gold products offered by online platforms fall outside its regulatory framework.
Digital gold is back in focus during the festive gold-buying season, with a new World Gold Council report projecting the global market could grow to $160–170 billion by 2031 from around $45–55 billion currently.
The report, released on October 19 in collaboration with Boston Consulting Group, estimates the market could expand at around 27% annually over the next five years. It also identifies as much as $700 billion in long-term latent demand if major barriers to adoption are addressed.
For investors in India considering digital gold around Dhanteras and Diwali, however, the growth forecast comes with an important regulatory distinction.
The Securities and Exchange Board of India (SEBI) had cautioned investors in November 2025 about certain digital gold and e-gold products offered through online platforms, saying these products operate outside its regulatory purview.
SEBI Digital Gold Warning: What Investors Should Know
SEBI said digital gold products covered by its warning are neither notified as securities nor regulated as commodity derivatives.
This means investors buying such digital gold products do not receive the investor-protection mechanisms available under the securities-market framework.
The regulator also flagged counterparty and operational risks associated with such products.
SEBI's warning, however, should not be confused with all forms of investing in gold electronically. The regulator specifically identified exchange-traded commodity derivative contracts, Gold Exchange Traded Funds (Gold ETFs) offered by mutual funds and Electronic Gold Receipts (EGRs) traded on stock exchanges as regulated gold products.
These products can be accessed through SEBI-registered intermediaries and are governed by the applicable regulatory framework.
Digital Gold Market Could Reach $170 Billion By 2031
The renewed attention on digital gold follows a World Gold Council and Boston Consulting Group study that estimates the market currently stands at around $45–55 billion.
Under its base-case scenario, the market could grow at approximately 27% annually to $160–170 billion by 2031.
A faster adoption scenario could take the market to $270–280 billion over the same period. The report separately estimates up to $700 billion of long-term latent demand if barriers holding back investors are addressed.
Investor interest is already high. Nearly nine in 10 retail investors surveyed globally said they would consider investing in digital gold under the right conditions.
The study was based on a survey of more than 12,000 retail investors across 12 markets and interviews with 20 industry experts.
Why Digital Gold Is Attracting Younger Investors
The World Gold Council found particularly strong interest among younger investors. Awareness of digital gold stood at around 50% among people aged 25–34, compared with 23% among investors aged 55 and above. Younger investors were also around twice as likely to say they would invest if existing barriers were addressed.
The report identified trust as one of the biggest factors determining whether this interest converts into actual investment. Nearly four in five investors said trusting the provider was a priority.
Digital gold could also bring new investors into the broader gold market. Around 65% of the latent demand identified by the study came from people who do not currently invest in gold.
Is Digital Gold Safe To Buy?
For Indian investors, the answer depends on the product being purchased and the regulatory framework governing it.
SEBI's November 2025 caution specifically warned that digital gold and e-gold products operating outside its regulatory framework may expose buyers to counterparty and operational risks. Investors in such products also do not have access to securities-market investor-protection mechanisms.
Investors looking for regulated routes to gold can consider the alternatives identified by SEBI, including Gold ETFs, exchange-traded commodity derivatives and Electronic Gold Receipts.
With festive demand putting gold investments back in focus and the global digital gold market projected to more than triple over the next five years, the regulatory status of the product remains an important factor for investors before making a purchase.
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This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
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