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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