Page 29 - Bullion World Volume 3 Issue 12 December 2023
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Bullion World | Volume 3 | Issue 12 | December 2023
Challenges include:
1. Limited awareness of digital gold as an
investment avenue.
2. Liquidity issues in secondary markets, despite
sovereign gold bonds being available for a while.
3. Encouraging Indian consumers to move away
from physical gold purchases.
Digital gold can potentially promote financial inclusion
in emerging markets where access to traditional
financial services is limited. Leveraging technologies
like the Unified Payments Interface (UPI), and apps
like Spare8 are making digital gold investment more
accessible and user-friendly. As UPI extends to other
countries, the digitisation of gold in these markets
becomes feasible.
While digital gold offers numerous benefits, it also
poses risks, including the lack of regulation. Investors
should choose reputable platforms and remain
vigilant against potential scams. Partnering with
trusted providers can enhance security and trust.
Traditionally, gold and silver have been purchased
physically, but technology has introduced remote
storage options. Gold is renowned as a hedge against
market volatility, and its instant liquidation value
makes it an attractive asset. Custodians, trustees,
and escrow services enable secure online storage of
gold, reducing the risk of loss or theft.
The blend of physical and digital, often referred
to as phygital allows people to buy gold online in
small denominations, increasing accessibility and
reducing risks. Digital gold transactions are as simple
as money transfers, backed by gold held in demat Conclusion:
accounts. However, the credibility and financial In conclusion, digital gold stands at the intersection
strength of companies offering digital gold are critical of innovation and tradition, offering a convenient
factors.
and secure avenue to diversify investment
portfolios, particularly in emerging markets.
Digital gold offers an opportunity to broaden As investors navigate this evolving landscape,
portfolios for both retail and institutional investors. It opportunities abound, from micro-transactions
allows for micro-transactions that can accumulate that accumulate over time to the acquisition of
over time and lead to the acquisition of physical gold physical gold or other assets. However, awareness,
or other assets, driving demand for the industry.
regulatory frameworks, market volatility, and
the ever-present risk of fraud underscore the
Investing in digital gold offers accessibility, liquidity, importance of informed decision-making. Digital
transparency, and security compared to physical gold, with its accessibility, liquidity, transparency,
gold. Still, investors must know the risks, including
and security, is a promising addition to the
fraud, market fluctuations, charges, redemption investor's toolkit, but the journey demands a careful
restrictions, and tax implications. Regulatory weighing of opportunities and challenges.
frameworks, like those established by SEBI in India,
are essential to ensure investor protection.
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