What is digital gold and what are the pros and cons of investing in it?

Digital gold is a virtual method of buying and investing in yellow metal without having to physically hold gold. You can buy it online. And the minimum purchase or sale value is one rupee.

Why is it important?

There are downsides to buying physical gold. First, the question of identifying its purity and legitimacy. Second, there are storage and storage challenges.

On the other hand, digital gold is purchased online and stored by the seller in insured vaults on behalf of the buyer.

What about the purity of the gold in question?

The metal purchased is 24 carat gold, which is 99.5% pure. In addition, the buyer can be sure of its purity as it is certified by government-licensed agencies.

There are other benefits to investing in digital gold.

First, an investor can physically pick up gold at their fingertips.

It is also very fluid. Units can be easily bought or sold anywhere, anytime.

The digital gold you have purchased can be used as collateral for online loans.

Your purchase is not only stored securely, it is also 100% insured.

Last but not least, you can exchange them for physical gold in the form of jewelry, coins and bullion.

Digital gold: pros and cons

· An investor can take physical gold delivery at his fingertips
Invest an amount as small as Re 1
Can be used as collateral for online loans
Digital gold is real and the purity is 24K
It is safely stored and 100% insured
Can be exchanged for jewelry, gold coins and bullion

· Rs 200,000 limit to invest on most platforms
· No official regulatory body such as RBI or Sebi
· Shipping and payment charges may apply
Sometimes companies offer a limited retention period

There are three major digital gold companies in India – MMTC-PAMP India, Augmont Gold Ltd, and Digital Gold India.

Meanwhile, apps like PhonePe and Paytm offer a platform to invest in digital gold.

In August 2021, exchanges asked stockbrokers to stop selling digital gold.

The directive reportedly hit stock exchanges from the Indian Securities and Exchange Council. The exchanges then sent a circular to the brokers to comply with the guidelines.

Therefore, stockbrokers have stopped selling digital gold, while mobile wallets and investment platforms continue to do so.

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