Digital gold: what the gram on your app is a claim on

What do you actually own when you buy digital gold?

You own a record. The app shows grams, and the metal sits with a custodian that the seller appoints. The IIFL explainer puts it in one line: the app shows grams, the vault holds metal.

When you pay, the price locks at the live rate, the custodian is told to allocate the matching weight to your account, and your statement gains a line. IIFL describes the gold as 24-carat, 999.9 fine, held in a vault that typically carries insurance and periodic third-party audits.

Two details matter more than the purity. The first is who the custodian is. The second is whether the gold is held in trust for buyers, which IIFL describes as typical but which differs from seller to seller. The grams on your screen are only as good as that arrangement, because it is a private contract and nothing else backs it.

Who regulates digital gold, and who does not?

Nobody in the securities market does. On 8 November 2025 SEBI issued PR No. 70/2025, titled "Caution to public regarding dealing in 'Digital Gold'". Its text says such products are neither notified as securities nor regulated as commodity derivatives, and that they operate entirely outside SEBI's purview.

The release goes on to say that digital gold products may expose investors to counterparty and operational risks. It also says that none of the investor protection mechanisms under securities market purview are available for them. That is SEBI's own wording, read from the release on 12 October 2026.

The same release names the gold products SEBI does regulate. They are exchange traded commodity derivative contracts, Gold Exchange Traded Funds offered by Mutual Funds, and Electronic Gold Receipts tradeable on stock exchanges.

In plain terms, a counterparty risk is the risk that the company on the other side of your contract fails to do what it promised. An operational risk is the risk that something breaks in the running of the vault, the app or the delivery. Neither goes away because the product feels like a payment app.

Our view is that the release is narrow. It says the usual safety net, a regulator that sets disclosure and audit rules, is absent, and the seller's contract takes its place.

What does the statement show, and what does it leave out?

The statement shows a weight of gold and a value at the current rate. It does not show the vault, the custodian's name, the audit report or the trust deed. Those sit in documents you have to go and ask for.

IIFL notes that no dedicated regulatory framework exists for the product and that the protections are contractual and structural rather than statutory. It advises a buyer to look at the custodian agreement, the insurance and the audit reports before the first purchase.

That gives you a short list of things to find out for any app you hold gold on:

• the name of the custodian and whether the gold is held in trust for buyers
• whether the vault stock is audited against customer holdings, and by whom
• what the insurance covers, in the seller's own words
• what happens to your grams if the seller stops operating

If an app cannot answer these in writing, your grams rest on terms you have not read.

What does it cost to get in and out?

IIFL lists four costs. GST of 3 percent applies to every purchase and is not recoverable for an individual. The platform spread, the gap between the buy price and the sell price quoted at the same moment, typically runs around 2 to 3 percent. Storage is often free for an initial period, commonly around five years, after which some platforms levy an annual fee. Redemption as a coin or bar adds delivery and making charges.

A worked example shows how the first two combine. You put in ₹5,00,000. Assume the 3 percent GST is charged on the gold value and the ₹5,00,000 covers both.

• Gold value: ₹5,00,000 ÷ 1.03 = ₹4,85,437
• GST: ₹5,00,000 − ₹4,85,437 = ₹14,563
• Sold back at the same moment with a 2 percent spread: ₹4,85,437 × 0.98 = ₹4,75,728
• Sold back with a 3 percent spread: ₹4,85,437 × 0.97 = ₹4,70,874

Your ₹5,00,000 is worth between about ₹4,70,900 and ₹4,75,700 the instant after you buy it. To get back to ₹5,00,000 on a sale, the price has to rise by ₹5,00,000 ÷ ₹4,75,728 − 1, which is 5.1 percent at a 2 percent spread. At a 3 percent spread the figure is 6.2 percent.

Those numbers are the cost of entry and carry no forecast of the gold price. They matter most to someone who buys small amounts often, because each purchase pays the 3 percent GST again and carries its own spread.

Source: GST, spread, storage and redemption charges from IIFL, page dated 14 July 2026, read 12 October 2026. IIFL calls its figures indicative, and your own app's terms govern. The ₹5,00,000 example is illustrative.

How do you exit, and how long does it take?

You have two routes. A sell order at the live rate sends proceeds to your bank account, which IIFL says typically takes one to two working days. Or you request physical delivery of coins or bars once your holding crosses the seller's minimum weight, with delivery and making charges applying.

Buying is done in about a minute and selling takes days. IIFL explains that the metal has to be released from your allocation before money moves, which is why the two directions differ.

One limit is worth knowing before a family plans around the grams. IIFL says RBI's 2026 lending rules do not admit digital gold balances as loan collateral. Jewellery in the cupboard can back a gold loan, while grams on an app cannot.

Which three questions fit any holding?

Ask three questions of anything you hold: who holds it, who checks the holder, and how do you leave.

For digital gold the honest answers are a custodian the seller picked, no securities regulator, and a sale that settles in a day or two after a spread. Plenty of holders can live with those answers, as long as they know them before the position is large.

Apply the same questions to crypto and the answers need to be as concrete. Qatobit's answers come from how the platform is built. Assets are in institutional custody. Proof of Reserves is published live and is available at any time, so the accounting is not behind a request form or a quarterly cycle. The platform separates user funds from operational funds. User assets are insured. Nothing is charged for leaving any index, and the only charge on a basket is 0.35 percent when a rebalance happens, with no annual management fee.

Market risk remains in every one of these. A custody answer tells you where the asset sits, and it says nothing about where its price goes.

If you already hold a portfolio and want a rules-based crypto sleeve in it, you can invest in QSI Growth or start a Bitcoin SIP on the same footing. For what gold's price depends on, see why the gold price moves. For the same question about keys, see what a cold wallet protects.

Frequently asked questions

Is digital gold regulated by SEBI?

No. SEBI's PR No. 70/2025, dated 8 November 2025, says digital gold products are neither notified as securities nor regulated as commodity derivatives, and operate entirely outside its purview. The gold products it does regulate are Gold ETFs from mutual funds, Electronic Gold Receipts and exchange traded commodity derivatives.

What does the gram of digital gold on my app represent?

It is a claim on gold held by a custodian, recorded as a weight in your account. IIFL describes it as 24-carat, 999.9 fine gold held in a vault. The strength of the claim depends on the seller's contract and on whether the custodian holds the gold in trust for buyers.

What does digital gold cost to buy and sell?

IIFL lists 3 percent GST on every purchase and a buy-sell spread that typically runs around 2 to 3 percent. On ₹5,00,000 paid in, that leaves about ₹4,75,700 at a 2 percent spread and about ₹4,70,900 at 3 percent if sold straight back.

How long does it take to sell digital gold?

IIFL says sale proceeds typically reach the bank account in one to two working days. Physical delivery of coins or bars is possible above the seller's minimum weight, with delivery and making charges.

Can I borrow against digital gold?

According to IIFL, RBI's 2026 lending rules do not admit digital gold balances as loan collateral. Physical jewellery and approved coins can back a gold loan, and grams held on an app cannot.

Crypto investments are subject to market risk. Not financial advice.