The recent sell-off in gold and silver was fast and sharp, revealing an important reality. Owning gold is not only about price; it also involves storage, access to cash, and daily risk.
In Pakistan, savers, jewelers, and corporate treasuries are now paying closer attention to digital gold, with many seeing it as a more convenient option after the crash.
However, digital gold is not risk-free, as it only shifts the type of risk. It explains how digital gold works, why its adoption is rising, and provides a clear checklist for Pakistani investors and treasuries weighing digital and physical gold.
Market Shock and Investor Response
In January, a policy shock strengthened the US dollar. At the same time, clearing houses raised margin requirements. This led to fast and forced selling in futures markets. The impact quickly reached physical markets.
For Pakistani gold holders, two problems became clear. First, selling physical gold quickly is not easy. Second, storage and insurance costs remain high.
At the same time, demand for digital access to gold increased. Global flows into gold ETFs rose strongly in 2025 and in early 2026. Investors looked for easier and faster ways to hold gold. In fact, global gold ETF assets more than doubled in 2025. Asian gold ETFs also received billions of dollars in January 2026.
What is digital gold?
Digital gold means you own a small share of real gold stored in a vault. You buy and sell it online.
Some providers allow you to redeem your holding into physical bars. Others offer pooled ownership. In this case, you own a share of a larger bar.
The World Gold Council is testing new pooled gold systems. The goal is to improve how gold is traded and settled. This shows that the market is becoming more formal and structured.
Digital gold products include mobile saving apps and digital ledger systems. The main benefit is simple. You can buy small amounts and sell them quickly.
Why adoption is accelerating
Two facts explain the growth:
- First, investment demand for gold rose sharply in 2025. Gold ETFs recorded their strongest inflows in years. Total holdings also increased. Both retail and institutional investors added exposure.
- Second, Pakistani fintech firms now offer gold-linked savings. These include Shariah-compliant products and installment-based gold purchases.
Together, these trends support digital gold growth in Pakistan. Still, long-term success depends on trust. It also depends on proof of reserves and clear legal rules.
Digital vs physical gold for Pakistan
Let’s look at the advantages and risks:
Digital gold advantages
- You can buy and sell instantly on a platform.
- You do not need to find a buyer in the Sarafa market.
- You can start with small amounts.
- Many providers publish vault audits and reserve reports.
- Saving plans and pricing are easy to use.
Digital gold risks
- Your ownership depends on the provider and its custodian.
- Physical delivery can be slow and expensive for large amounts.
- Pakistan does not yet have a clear regulatory framework for digital gold.
- Not all products are Shariah-compliant. This matters for many local investors.
Physical gold advantages
- You hold the asset directly.
- Gold jewelry and coins have cultural and social value.
- There is no platform or provider risk.
Physical gold risks
- Selling large volumes quickly is difficult.
- Storage and insurance create ongoing costs.
- Purity and testing risks remain with smaller dealers.
Local options and regulation
Pakistan already has fintech firms offering gold-linked savings and installment plans. These products are backed by physical gold and are partly Shariah-aligned.
Startups such as Zariah and fintech platforms such as Oraan allow users to buy gold with small amounts. However, users should always check custody arrangements and audit reports.
Globally, the World Gold Council is running a pooled gold pilot. London is also working on digital gold market standards. These developments may shape future regulation. Pakistan’s regulators should monitor these models and define minimum standards for custody and reporting.
Practical checklist for treasuries, wealth managers and jewelers
- Check custody and audits
Ask for independent vault audits and regular reserve reports. - Test redemption
Try a small physical delivery before committing large amounts. - Review legal terms
Confirm who owns the gold, where it is stored and how disputes are handled. - Confirm Shariah and tax treatment
Obtain formal Shariah approval and tax guidance. - Balance digital and physical holdings
Keep physical gold for cultural and operational needs. Use digital gold for savings and liquidity. - Set counterparty limits
Do not place all exposure with one provider.
Conclusion
The crash made one point very clear. The way you hold gold matters.
Digital gold offers speed, small entry sizes and easier access. Physical gold offers direct ownership and cultural value.
For Pakistani investors and corporate treasuries, the best choice is practical. Use digital gold for liquidity and savings. Keep some physical gold for operational and social needs. Always select providers with clear audits, strong custody and simple redemption rules. This approach turns market stress into a controlled and informed decision.
