The Gem and Jewellery Domestic Council of India has recommended to take the prevailing gold monetization scheme on to the digital ecosystem.
The central feature of the proposal is the formal transition towards a digital gold ecosystem, whereby physical gold is converted into dematerialised gold balances held within the banking system through structured account mechanisms.
In recent years, investment demand in gold bullion and coins has witnessed strong and sustained growth, reflecting increasing investor preference for physical gold as a store of value. The revamped GMS framework can effectively leverage this trend by enabling investors to seamlessly monetise such holdings, said GJC.
The scheme provides an avenue for investors to earn a return on idle gold assets, including bullion, coins and jewellery, by integrating them into the formal financial system.
This converts traditionally non-yielding assets into interest-bearing financial instruments, thereby enhancing portfolio efficiency without requiring liquidation of gold holdings, it said.
The proposed framework is expected to materially improve gold mobilisation by leveraging the reach and trust of the jewellery trade. Enhanced mobilisation of idle gold can reduce dependence on imports, support domestic supply, and contribute to moderation of the Current Account Deficit, it added.
Further, the shift towards a regulated digital gold framework will strengthen formalisation, improve compliance standards and enhance overall market efficiency, said GJC.
Rajesh Rokde, Chairman GJC said the Council has been engaging with the RBI and the Ministry of Finance for building a robust and future-ready Gold Monetisation framework.
By unlocking the value of idle gold, the scheme has the potential to strengthen domestic supply, reduce reliance on imports, and contribute meaningfully to India’s macroeconomic stability, he added.
Avinash Gupta, Vice Chairman, GJC said the revamped GMS framework is designed to be practical, scalable, and fully aligned with regulatory expectations.
Importantly, it enables investors to earn returns on idle gold—including bullion, coins, and jewellery—thereby transforming a traditionally non-yielding asset into a productive financial instrument, he said.
This will play a critical role in formalising the sector and improving overall market efficiency, he added.
GJC believes that the proposed model provides a practical, scalable, and regulator-aligned solution to revitalise GMS. The Council will continue its engagement with the RBI and the Ministry of Finance to facilitate implementation.