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This startup is offering cryptos backed by gold, silver to Indians

OroPocket users can invest in precious metals and spend them in real-time using UPI and asset-backed cards. (Photo: Reuters)Premium
OroPocket users can invest in precious metals and spend them in real-time using UPI and asset-backed cards. (Photo: Reuters)

  • The digital gold space in India is largely unregulated with a variety of apps offering this product including Kuvera and Paytm Money. Investors can also invest in formal financial instruments linked to gold such as gold ETFs, sovereign gold bonds.

MUMBAI: Oropocket, a crypto firm founded in 2018, allows Indians to invest in cryptocurrency tokens backed by gold and silver. The Delhi-headquartered company has a user base of 8,000 and assets under management worth $350,000, according to Tarusha Mittal, its COO and co founder.

"The value of fiat currency is continuously depreciating. Instruments like a savings account and FD are not even able to beat inflation. With banks failing, low insurance on the savings account, we believe people should have an alternative. Using OroPocket, users can invest in precious metals and spend them in real-time using UPI and asset-backed cards. We utilize Polygon, Ethereum, and Tezos network for complete transparency and to give users control of their assets," said Mittal

“Investors can buy precious metals by transferring money to us through payment methods such as UPI or cards. They will then get equivalent tokens. Physical gold or silver is stored against these tokens in vaults across the world. In India, we count IDBI Bank and Augmont as our partners for this purpose. Investors can buy and sell these tokens at will and also take delivery of physical gold for a fee," said Mittal. 

"We also have an instant redemption solution up to 50,000. Investors can give a redemption request on our app and equivalent money will be instantaneously credited to their bank account. We do this by maintaining a reserve account with ICICI Bank and RBL. Users can then spend this money on whatever they need. However users should note that GST of 3% does apply on the precious metals in question and the investment is made net of this amount," she said.

Oro Pocket also has an 'asset backed' debit card issued in conjunction with SBM Bank (State Bank of Mauritius) and mastercard, a spokesperson for the company told Mint. Users can spend money from it which is automatically adjusted against their 'asset balance' at the back end.

The digital gold space in India is largely unregulated with a variety of apps offering this product including Kuvera and Paytm Money. Apart from this unregulated market, investors can also invest in formal financial instruments linked to gold such as gold Exchange Traded Funds (ETFs) and sovereign gold bonds. 

The Securities and Exchange Board of India (Sebi) has also mooted a gold exchange where the precious metal will be traded in the form of Electronic Gold Receipts (EGRs). Existing stock exchanges have also been allowed to offer EGRs in a dedicated segment of the exchange. In case of metals other than gold, investors were largely confined to the physical (offline) market which involves storage risk or they must trade in metal futures. Last month however allowed mutual funds to launch Silver Exchange Traded Funds (ETFs) in India. Investors should be cautious while investing in precious metals through unregulated products, including cryptocurrency.

ABOUT THE AUTHOR

Neil Borate

Neil heads the personal finance team at Mint. A former colleague called them 'money nerds' and that's what they are. They cover topics like mutual funds, taxation and retirement, all to improve your chances of building wealth. Neil graduated with a degree in law and economics. He passed the CFA Level I exam and began his writing career at Value Research, a mutual fund research firm in 2016. He joined the personal finance team Mint in 2019. Everyday, the Mint Money Team tackles personal finance questions such as where to invest and where to borrow, through articles, charts and reader queries. They also have a daily podcast - 'Why Not Mint Money' and an annual ranking of mutual funds - the Mint 20.
Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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