Money Clarity

Is digital gold safe in India?

Short answer: the gold itself is real and held in a vault, but digital gold is not regulated by SEBI or the RBI, and SEBI said so publicly in November 2025. That does not make it a scam. It means your protection comes from the trustee arrangement and the provider staying solvent, not from a regulator. Unyfy distributes digital gold, so read this knowing that - and then decide.

The problem: nobody selling gold apps will tell you this part

Digital gold is sold inside almost every payments app in India with a one-tap flow and a live price ticker. What is almost never on that screen is the regulatory status of what you just bought. SEBI issued a caution notice in November 2025 precisely because the product had become ubiquitous while sitting outside the rulebook.

Digital gold is not classified as a security or a commodity derivative, so SEBI does not regulate it
The RBI does not regulate it either - it is not a deposit and not a payment instrument
That means no investor grievance mechanism, no SEBI-registered intermediary obligations, no compensation fund
SEBI also cautioned its registered intermediaries against dealing in it, which is a stronger signal than the consumer-facing note

How big is the exposure, concretely

This is not a theoretical risk and it is not a catastrophic one either. It is a specific, bounded gap that you can reason about.

Your gold is held by a trustee on your behalf, and reputable providers publish independent audits of vault holdings against customer balances
If the provider fails, you are an ordinary creditor relying on that trustee structure holding up in an insolvency - not on a regulator stepping in
The 3% GST you pay on purchase is gone the moment you buy, whichever way the price moves
The buy-sell spread is set by the provider, not by an exchange, so there is no market price you can check it against
Custody typically has a time limit - most providers require you to take delivery or sell within a stated period, commonly around five years

What that costs you compared with the regulated options

The honest comparison is not safe versus unsafe. It is which trade-off you are making for what amount of money.

On Rs 5,000 of digital gold, the 3% GST is Rs 150 before the price has moved at all
A gold ETF carries no GST on units, is regulated by SEBI, and trades on an exchange where the price is public
A gold ETF needs a demat account and trades in whole units, so it does not work at Rs 10 or Rs 100
Sovereign Gold Bonds were the best instrument on tax, and the government stopped issuing fresh tranches after February 2024

When digital gold is still the reasonable choice

There is a real case for it, and it is not the one the ads make. It is about amount and about friction, not about returns.

You want to save Rs 50 or Rs 200 at a time, which no regulated gold instrument supports
You have no demat account and opening one for a few thousand rupees is not worth the effort
You are saving toward jewellery or coins and intend to take physical delivery, where digital gold converts and an ETF does not
You are treating it as small, deliberate savings rather than as your gold allocation for retirement

What to check before you buy from anyone, including us

These are the five questions that separate a real custody arrangement from a balance shown on a screen. Any provider should be able to answer all five in writing.

Who is the custodian, and is it a separate legal entity from the app you are buying inside
Is the vault insured, and by whom
Are holdings independently audited against customer balances, and how often is the report published
What is the buy-sell spread right now, and is it shown before you confirm an order
What is the custody time limit, and what happens at the end of it

Where Unyfy stands on this

Unyfy is a distributor of SafeGold (Digital Gold India Pvt. Ltd.), not a custodian. We earn on distribution. Stating the SEBI caution on our own page is not modesty - it is the only version of this page that survives being fact-checked.

The metal is held by SafeGold in an insured vault and audited against outstanding customer balances
The 3% GST and the buy-sell spread are shown before you confirm any order, not after
If you want a regulated instrument and can use a demat account, a gold ETF is the better answer and we will not argue otherwise
Gold of any kind is a poor idea while you are carrying a credit card balance at 36 to 42 percent - clear that first

Common questions

Is digital gold regulated in India?

No. Digital gold is not classified as a security or a commodity derivative, so it falls outside SEBI’s remit, and it is not a deposit or payment instrument, so it falls outside the RBI’s. SEBI issued a public caution about this in November 2025. Gold ETFs, gold mutual funds and Electronic Gold Receipts are the SEBI-regulated alternatives.

What happens to my digital gold if the app shuts down?

The metal is held by a custodian under a trustee arrangement rather than by the app, so it is not the app’s asset to lose. But your recourse depends on that trustee structure holding up in an insolvency, not on a regulator or a compensation fund. That is the specific risk SEBI pointed at.

Is digital gold better than a Sovereign Gold Bond?

The comparison no longer exists for new money. The government stopped issuing fresh SGB tranches after the 2023-24 Series IV in February 2024. Existing bonds can be bought on the secondary market, but the tax-free maturity benefit applies only to original subscribers holding to the full eight years.

How much does digital gold actually cost to buy?

Three percent GST on the purchase amount, which you never recover, plus the provider’s buy-sell spread, which means you are down slightly the moment you buy. On Rs 5,000 that is Rs 150 of GST before the price moves at all. Gold ETF units carry no GST, though they need a demat account.

Hundreds of users have been walked through this trade-off by our team, and the split is consistent: people saving in hundreds of rupees choose digital gold and accept the regulatory gap knowingly, and people allocating lakhs move to a gold ETF. Both are defensible. Being sold one without being told about the other is not.

Written by Danish Mirza, founder of Unyfy. 14 years in Indian lending and collections at Standard Chartered, Barclays, Ola Money and Uni Cards.
Last reviewed 2026-09-09.