Digital gold may lose a bit of its shine as sales are seen falling this year

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Digital gold sales may see a 5% drop in FY 22 due to a ban imposed by market regulator SEBI on buying digital gold from stock brokers. The curb is effective September 10. Stock brokers account for nearly 8-9% of the digital gold business and the digital gold business is likely to come down by 5% in FY22, the Economic Times quoted Gaurav Mathur, managing director Safegold. Safegold is one of the three digital gold players in the market. MMTC PAMP and Augmont are the other two.

Plans to expand in tier III, IV cities

According to the report, digital gold players are now looking to tie up with jewellers, fintech firms and money remittance firms in tier III and IV cities to expand their business, which is pegged at around Rs 4,000 crore.

Meanwhile, many jewellers have launched their own digital gold schemes ahead of the festive season. The digital gold has been gaining traction with customers after the second wave of Covid-19. Safegold has joined hands with Tanishq and Caratlane to sell digital gold during this festive season, according to the news report. Mathur is further quoted as saying that they have tied up with 200 small jewellers, fintech firms, money remittance firms in tier 2 and tier 3 cities for their digital gold products.

‘Hype in digital gold’

Renisha K Chainani, head of research, Augmont Goldtech, told the newspaper that the market regulator had not come up with any new ban. Quoting the relevant rule she told the daily it is only a reiteration of existing rules. “There is a hype about Digi gold only because it is a growing product,” she is quoted as saying in the report.