Purchases of digital gold through UPI fell 61% in October to ₹550 crore, the lowest this year, as investor sentiment weakened following repeated warnings that the product is unregulated. In comparison, digital gold purchases touched ₹1,410 crore in September, with the 2025 monthly average at around ₹951 crore, NPCI data shows.

Regulatory Warnings Trigger Sharp Drop

SEBI recently clarified that digital gold is not regulated by any authority in India. The message quickly spread on social media, with influencers cautioning buyers that platforms offering digital gold could shut down, making redemption difficult.

As a result, transaction volumes collapsed from over 100 million in August and September to just 21 million in October — an 80% plunge.

Festive Boost Fizzles Out

Digital gold had been gaining strong traction through apps like Paytm, PhonePe, Jar, Google Pay, Amazon Pay and Tanishq. Sales rose from ₹762 crore in January to ₹1,410 crore in September, supported by rising gold prices, easy accessibility and fractional ownership.

This momentum was expected to peak during Dhanteras on October 18, but the regulatory noise overshadowed festive buying.

How Digital Gold Works

Digital gold sold on fintech platforms is backed by physical gold held by MMTC-PAMP or SafeGold. Though easy to buy and sell, it comes with GST, storage and platform charges.

By contrast, Gold ETFs, regulated by SEBI, offer similar benefits with lower costs and greater protection