Govt looking at regulating digital gold schemes: Official

Our Bureau New Delhi | Updated on February 06, 2021

The Finance Ministry has asked IIM-Ahmedabad’s India Gold Policy Centre (IGPC) to come out with a paper on how gold refining can be ramped up in the country. Policy inputs are needed on this front as the government intends to shortly work on a plan to strengthen gold refining, K Rajaraman, Additional Secretary, Department of Economic Affairs (DEA) in Finance Ministry, said on Saturday.

While the possibility of strengthening gold mining is a distant target, there is certainly a possibility of ramping up gold refining, he said at the 4th Gold & Gold Markets virtual conference 2021, organised by IGPC@IIMA.

He also said the Mines Ministry is working on amendments to the Mines and Minerals Development and Regulation Act (MMDRA) and these will have beneficial impact on prospects for gold mining.

Digital gold

Rajaraman said the government is in the process of deciding on the regulation of digital gold accumulation schemes and how consumers can be protected while at the same time ensuring the industry grows. He said the emerging facet of gold is digital gold, which is an unregulated space.

“We feel there is need for some kind of regulation to protect consumers against default risk or fraud. This (digital gold) is a noble and convenient way of saving. If adequate protection is given, the gold market could grow,” he said. Rajaraman wanted IGPC to study the digital gold accumulation schemes and come out with a paper that could help in policy- making on this front.

Spot gold markets

Rajaraman asked the IGPC to start working on regulation of domestic spot gold markets. It has been asked to come up with suggestions for strengthening the Warehousing (Development and Regulation) Act (WDRA) and Securities Contracts Regulation Act in light of the National Spot Exchange Ltd scam of 2013.

He also underscored the need to study the change in consumer behaviour in gold buying post Covid-19.

Published on February 06, 2021

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