New Delhi, March 10 -- The Karnataka government's action against Bengaluru-based digital gold savings app Jar has become a test case for India's wider digital gold industry. Acting on inputs from the Reserve Bank of India (RBI) and a public caution from the Securities and Exchange Board of India (Sebi), the state has booked Jar Gold Retail Pvt Ltd and its directors under the Banning of Unregulated Deposit Schemes (BUDS) Act.

Because similar products are sold across the market, the case could shape how digital gold platforms are scrutinized in India. Mint explains the legal implications of the investigation and whether the BUDS Act can apply to such products.

The case against Jar traces back to regulatory and police communications reprod...