NSE aims to convert up to 300 tonnes of gold into digital receipts

what happened

India's National Stock Exchange (NSE) plans to turn 200 to 300 tonnes of gold into Electronic Gold Receipts (EGRs) within the next 12 months, according to Sriram Krishnan, the exchange's Chief Business Development Officer. He said the target equals more than a third of the country's yearly gold imports. The EGR system launched in May, and the exchange is now encouraging citizens to buy regulated digital gold instead of physical bullion.

The receipts come in 100-milligram and one-gram units and can be traded through brokers much like shares. Krishnan said all receipts created so far were made from domestic recycled gold, with no money spent on imports for that purpose. The exchange also expects holders of existing gold to deposit it into the system. Indian households are estimated to hold about 30,000 tonnes of gold, and the NSE is aiming for a 1% conversion rate.

why it matters

For markets, the plan matters because it aims to reduce India's reliance on gold imports and, over time, make the country a price setter in bullion. If it succeeds, demand for physical gold in one of the largest consuming nations could weaken, though the figures remain a target rather than a result.

market impact

Gold: India's shift to digital receipts could reduce demand for imported bullion

• ▼Gold pressure down — shifting physical gold into digital receipts could cut India's import demand

tags

instruments