What Is Tokenised Gold? India Sees Rising Interest in New Digital Gold Investment Option

A new form of gold investment known as Tokenised Gold is gaining attention in India, offering investors a way to buy gold digitally without purchasing physical jewellery, coins or bars.

Tokenised Gold uses blockchain technology to represent ownership of physical gold through digital tokens. Each token corresponds to a specific amount of real gold, which is stored in secure vaults. Investors can buy and sell these tokens online at any time, without being restricted by stock market trading hours.

One of the biggest advantages of Tokenised Gold is that it allows investors to start with small amounts, making gold investment more accessible. In some cases, token holders can also convert their holdings into physical gold in the form of coins or bars.

However, experts caution that Tokenised Gold is not yet governed by a dedicated regulatory framework in India, unlike Gold ETFs and sovereign gold bonds. This means investors may face legal and regulatory uncertainties if disputes arise.

Since tokenised assets may be classified as Virtual Digital Assets (VDAs), gains could attract 30% tax and 1% TDS, similar to certain crypto-related investments. Another concern is that investors may not be able to independently verify the physical gold backing the tokens, which is typically stored in overseas vaults.

While Tokenised Gold offers a modern and flexible way to invest, financial experts suggest that Indian investors seeking greater regulatory protection may currently find Gold ETFs and Electronic Gold Receipts (EGRs) to be safer alternatives.