Digital gold, along with crypto assets, may soon be brought under a regulatory ambit as the government, market regulator Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) are working on ways to regulate such investments in the wake of rising concerns over their unchecked growth, Livemint reported on Monday.
The aim is to extend protection to investors as in the case of regulated securities, said the report, adding that the finance ministry is looking to address the issues related to "transparency, outrageous claims and lofty promises" made by some firms to lure people.
To regulate digital gold, the government may categorise it as a 'security', a person aware of the development told Livemint. Thereafter, all registered investment advisers, brokers and their connected entities would be able to offer digital gold, added the source.
Meanwhile, the government is also working on the way forward for cryptocurrencies in India. Prime Minister Narendra Modi on Saturday held a key meeting with regulators to draft a long-term strategy for crypto assets.
Earlier in October, Sebi had restricted registered brokers and investment advisers from offering digital gold and other unregulated investment products like cryptocurrency. It even said that offering such products violates the Sebi Act and thus, invites monetary penalties and, in some cases, licence cancellations.