What Is Digital Rupee? How Is It Different From Cryptocurrency?
The Reserve Bank of India is set to launch the pilot of its central bank digital currency (CBDC),
which it categorizes as legal tender in a digital form. Commonly known as the digital rupee, it will
be exchangeable at par with existing currencies and will be considered acceptable for payments and a
safe store of value.
What Is Digital Rupee?
A digital currency is any currency that is available entirely in electronic form. Currencies’
electronic types already predominate a large number of nations’ financial systems. Digital currency,
however, is exclusively exchanged through virtual means and does not leave a computer network.
The three major varieties of digital currency are cryptocurrency, central bank digital currency
(CBDCs) and stablecoins.
The foundation of cryptocurrency is provided by blockchain technology which is the most usual form
of distributed ledger used by digital currencies. According to CoinMarketCap, the availability of
cryptocurrencies is more than 21,000.
What Are The Advantages Of Digital Rupee?
- Faster Mode of Payment: Digital currency can make your payments much faster than current means like automated clearing houses or wire transfers that take days for financial institutions to confirm a transaction.
- Cheaper Global Transfers: At times global transactions can get very expensive. Individuals are charged high fees to move funds from one nation to another, especially when it includes currency conversions. Digital assets could interrupt this market by making the transaction cost-effective and quick.
- 24/7 Availability Digital currency transactions work at the same speed i.e. 24 hours a day and seven days a week. On the other hand, existing money transfers frequently take more time during weekends and outside normal working hours because banks are shut and cannot confirm transactions.
