India's Digital Gold Rush: Will 2026 Be the Year of Regulatory Reckoning?

India is in the middle of a digital gold rush, and it’s happening one UPI transaction at a time. Millions of Indians are buying gold in fractions as small as one rupee, drawn by convenience, rising prices, and the comfort of a familiar asset. But as volumes explode, regulators are flashing warning signs. With SEBI flagging serious risks and 2026 looming as a potential turning point, digital gold now sits at a crossroads: mass adoption versus regulatory reckoning. Here’s what you need to know about the digital gold rush.

What is driving India’s digital gold boom?

India’s digital gold market is surging on the back of frictionless payments. Transactions via UPI hit 123.42 million in November 2025, a 142% jump from January, as investors increasingly buy gold in small, flexible tranches using apps they already trust.

How much money is flowing into digital gold?

In the first nine months of 2025 alone, Indians bought over ₹9,000 crore worth of digital gold. Monthly purchases climbed from ₹762 crore in January to ₹1,410 crore in September, underscoring strong retail momentum despite growing regulatory warnings.

If volumes are rising, why did transaction value fall in November?

Transaction value dropped 47% month-on-month in November to ₹1,215 crore after SEBI issued an advisory cautioning investors. While participation stayed high, average ticket sizes shrank—suggesting nervousness rather than retreat.

Why are investors flocking to digital gold despite warnings?

Convenience is king. Features like UPI Autopay, fractional investing starting at ₹1, and daily micro-purchases have turned gold into a habit rather than an event. For many first-time investors, digital gold feels easier than mutual funds or ETFs.

Who is driving this shift—older investors or millennials?

Millennials are leading the charge. Surveys show 65% of millennial investors prefer digital gold over physical purchases. Urban, internet-savvy, and mobile-first users see digital gold as accessible, liquid, and aligned with their financial behaviour.

What exactly is SEBI worried about?

SEBI has made it clear: digital gold is unregulated. It is neither a security nor a regulated commodity derivative. This means no investor protection framework, no disclosure norms, and no guaranteed safeguards if platforms fail.

Are complaints against digital gold platforms rising?

Yes. Complaints have climbed steadily—from 17 in 2020 to 112 in 2025, with 371 complaints filed over five years. Platforms like PhonePe, Paytm, Google Pay, and jewellery brands operate in a regulatory grey zone, raising concerns about accountability.

Is digital gold riskier than other gold investments?

Compared to regulated options, yes. Unlike Gold ETFs, exchange-traded derivatives, or electronic gold receipts, digital gold lacks SEBI oversight. Investors often don’t know where or how their gold is stored—or what protections apply if something goes wrong.

How has gold performed recently—and what’s the outlook?

Gold delivered stellar returns in 2025, rising over 50% year-to-date. Some forecasts suggest prices could reach ₹1.5–2 lakh per 10 grams in 2026, adding to gold’s appeal amid global uncertainty.

Is the RBI also increasing its gold exposure?

Yes. The Reserve Bank of India has aggressively added gold to its reserves. India’s gold holdings rose to 880 tonnes in 2025, with gold now accounting for 13.9% of total reserves, up sharply from a decade ago.

Are Sovereign Gold Bonds a better alternative?

For long-term investors, often yes. Sovereign Gold Bonds (SGBs) offer 2.5% annual interest and tax-free capital gains at maturity. Digital gold, by contrast, is taxed like physical gold, with higher short-term tax liabilities.

How is UPI infrastructure shaping the future of gold investing?

UPI has removed friction. Higher transaction limits, recurring payments via Autopay, and near-perfect success rates have made gold investing almost effortless. In 2024 alone, UPI processed 172 billion transactions, reinforcing its role as India’s financial backbone.

Will 2026 bring regulatory clarity for digital gold?

Pressure is mounting. Policymakers and market experts increasingly favour regulated gold avenues for investment, with digital gold likely confined to convenience-led, small-ticket use cases. Whether regulation arrives formally—or consolidation forces discipline—will define digital gold’s future in 2026.

(yMedia is the content partner for this story)