Bullion body IBJA establishes a self-regulatory body to bring transparency to digital gold

The India Bullion and Jewelers Association (IBJA) on Tuesday announced the formation of a self-regulatory division for the digital gold industry after Sebi warned investors that digital gold products are regulated neither as securities nor as commodity derivatives and that such products fall outside its jurisdiction and do not benefit from investor protection mechanisms available for Sebi-regulated gold instruments such as gold ETFs, electronic gold receipts or exchange-traded derivatives.On November 11, IBJA had written to Sebi, urging the market regulator to bring digital gold providers under its purview, or any other formal regulator, saying the move could allay fears of consumers being duped.

Now, the association itself has decided to set up a self-regulatory department to enhance market integrity and consumer confidence in the fast-growing Indian economy.
digital gold industry. This is done to promote consumer confidence and ensure market integrity, while proactively demonstrating effective self-governance to potentially avoid the need for external government regulation. A press release issued by the association states that the IBJA will formally establish a separate Self-Regulatory Division (SRD) solely focused on the management of digital gold. This division will be responsible for establishing the Self-Regulatory Framework (SRF), registering entities and setting up the compliance monitoring and enforcement mechanism.

To ensure broad industry acceptance, IBJA’s first action will be to convene a Digital Gold Industry Consultative Meeting (DGICM). Key invitees include major digital gold providers, custodians, consumer advocacy groups and information exchange regulators.

Following the DGICM, IBJA will prepare a comprehensive consultation document (CP) detailing proposed rules in critical areas, such as clear rules on minimum purity, physical support, insurance and separation of the underlying precious metal. stakeholders will establish rules for clear communication on risks, compensation and a defined complaints mechanism. There will be independent and periodic audits of the digital gold players.

The Final Self-Regulatory Framework (F-SRF) is scheduled to be officially published on March 31, 2026. It is intended to come into full force from April 1, 2026, giving the sector a four-month transition period to align systems and processes. Compliance with the F-SRF will be mandatory for all participating entities registered with the IBJA Self Regulatory Division.

A cornerstone of the F-SRF is transparency, with the aim of dispelling public doubts about the physical backing of digital gold. The framework will mandate a quarterly independent audit of the physical gold reserves of all affiliated entities. Periodic audits will be carried out by accounting firms with experience in the sector.

IBJA will establish a Digital Gold Transparency Portal to publicly display anonymized, aggregated compliance data and summaries of audit findings. The SRD will have the authority to impose fines, penalties and suspensions for non-compliance with the audit mandate or the F-SRF rules.