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Digital Gold: The Next Step Forward

Rhea Chaterji Vice President- Strategy & Partnerships at SafeGold



Whether it was the Kushans or the Indo-Greeks who first introduced gold coins to India, is a matter of debate. But it cannot be disputed that in the time since, gold has played an immeasurable part of our daily life- be it as a currency, a store of value, or for adornment.


While gold is associated with many positive attributes, its physical nature has meant that there are barriers to frictionless transactions- frequently due to concerns regarding purity or safety. This has played out in many different ways- for example, loans against ornaments can take a minimum of a few hours to process, and taking gold to be exchanged at your jeweller can be a long process involving negotiation over rates and deductions. Often this is due to the fact that while our needs have modernised, our ways of doing business when it comes to gold have remained rooted in the past.    


But when technology has changed the face of how we eat, shop or travel, why should gold be left behind? This is where digital gold steps in- bringing innovation to make gold become more fungible. By linking various stakeholders such as bullion dealers, jewellers, banks, mobile platforms and customers, digital gold multiplies the range of options that customers can exercise conveniently.


So what is digital gold?


Simply put, digital gold is a method of investing in physical gold without needing to physically hold the gold yourself. Digital Gold platforms allow customers to purchase fractional quantities (from ₹1) of gold, which is safely stored in an independent vault. Customers can incrementally add to their savings, while gaining a range of functionality, such as being able to sell their digital gold balance 24/7 against a live rate, get it delivered to their doorstep, or gift it to a loved one.


Bringing greater functionality to gold


What makes this more interesting is that the Customer’s options aren’t restricted to those fulfilled by the digital gold platform alone. Players such as SafeGold have created an ecosystem of partners, by providing a common technology infrastructure to make digital gold transactions seamless.


As a result, a customer can now choose to save digitally and redeem physically, by visiting their preferred jeweller through offline stores or online web platforms. A simple authenticating mechanism validates the customer balance and eligibility, and within minutes they can walk out after having exchanged their gold balance digitally for some jewellery. Rate and purity cease to be a worry, since the jeweller is receiving verified physical gold from SafeGold against these transactions.


Similarly, banks can now offer customers near instantaneous loans against their digital gold balance, using customised loan APIs and infrastructure created by SafeGold. With guarantees for purity and weight assurance, loans can be approved and disbursed within minutes, adding a magnitude of convenience for customers.


With an innovative and exciting range of avenues opening up, the onus is on us as members of the gold industry to see how technology can bring greater customer delight. 


Disclaimer: Views are personal and not the views of the publisher.