What is digital rupee? How is digital rupee different from cryptocurrency? The digital rupee can be exchanged for cash, which is equivalent to that the central bank likes the paper currency issued by the Reserve Bank of India. RBI will continue to issue CBDC, which has the same function as paper currency, but is not a decentralized asset like cryptocurrency.
What is digital rupee?
Rachit Chawla, CEO of Finway FSC, said that digital currency is basically a payment system, involving digital transactions in electronic form, not a tangible entity like Rupees. The Reserve Bank of India (RBI) has launched its digital rupee pilot project on November 1. "
"The digital rupee conceived by RBI will be generated through an advanced payment system, which is reasonable in price, easy to access, convenient, efficient, secure and reliable, and aims to further promote the digital economy. However, it should be pointed out that starting the digital concept currency is only a supplement to the existing financial transaction forms, not a replacement. It will provide users with additional payment options, while the existing payment system still exists. Therefore It is certain that digital currency will have no impact on the use of general currency, "he added.
Digital Rupee (e ₹) will be used to issue virtual currency for government securities trading. The money will exist in virtual form like other cryptocurrencies, but the digital rupee will not be decentralized, and it will be supervised by the Reserve Bank of India (RBI).
The digital rupee will be fully legal and acceptable to the Indian government. The launch takes place in two phases. This is the first pilot phase, and digital rupees have been launched for wholesale trading, that is, wholesale trading.
How is digital rupee different from cryptocurrency?
Mahesh Shukla, CEO and founder of PayMe, said, "There is no direct comparison between CBDC (Central Bank Digital Currency) and cryptocurrency, because digital rupees are not commodities or virtual assets, as opposed to cryptocurrency. In addition, cryptocurrency is not completely a currency"
This digital rupee can be converted into cash, which is equivalent to that the central bank likes the paper currency issued by the Reserve Bank of India. RBI will continue to issue CBDC, which has the same function as paper currency, but is not a decentralized asset like cryptocurrency.
What is the difference between the two?
Rachit Chawla of Finway FSC pointed out that, "Although both digital currency and cryptocurrency involve online transaction mode, there are subtle differences between them. Central Bank Digital Currency (CBDC) It refers to the digital form of a country's legal economy, and cryptocurrency is an alternative payment method with a unique algorithm. Digital currency can be called the national digital fiat currency, and cryptocurrency is a digital asset in the decentralized network. On the other hand, the digital currency is completely owned by the central bank and the government that sets the currency value. The value of cryptocurrency is independent of the central bank authorities, and follows a transparent process from mining to ownership to asset transfer. "
What is the purpose of introducing digital rupees?
The main goal of the digital currency pilot project launched by the Reserve Bank of India (RBI) is to promote India to make progress in the virtual currency competition. This is also due to the growing popularity of cryptocurrencies.
Rachit Chawla pointed out that due to the application of blockchain technology, digital rupees will improve efficiency and transparency, so the introduction will undoubtedly change the rules of the game. In addition, blockchain will make ledger maintenance and real-time tracking possible.
Both wholesale and retail customers have continuous access to the payment system. Indian customers can pay directly to save transaction costs and realize real-time account settlement. In addition, the use of digital rupees will speed up cross-border transactions and eliminate the need to open bank accounts.
Mahesh Shukla, CEO and founder of PayMe, added: "This will also help Indian customers to make direct payments, reduce transaction costs and achieve real-time account settlement. Digital Rupees will speed up cross-border transactions and eliminate the requirement to open bank accounts."
The impact of digital rupees on enterprises?
Gaurav Bhagat Academy (GBA), business coach and founder, said: "Wholesale CBDCs may change the settlement system of transactions and make them more feasible for users. This will also strengthen the country's overall digital economy and bring more financial inclusiveness. Soon, the Reserve Bank will also provide CBDCs for the retail industry. In addition, the use of digital rupees will accelerate cross-border transactions, even for users associated with specific bank accounts."
The Reserve Bank of India (RBI) will launch the Central Bank Digital Currency (CBDC) pilot project on November 1, 2022, which is expected to make the interbank lending market more efficient and secure.
As the top banks said, this move will reduce transaction costs and settlement risks by seizing the demand for settlement guarantee infrastructure or collateral. CBDC can be divided into two basic categories - retail CBDC and wholesale CBDC.
Initially, the Reserve Bank of India introduced digital currency for the wholesale sector. The Central Bank has used wholesale CBDCs for the settlement of interbank transfers and related transactions.
Nine banks participated in the wholesale pilot project
The Reserve Bank of India has selected nine banks to participate in the wholesale pilot project of digital rupees. They are National Bank of India, Baroda Bank, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC Bank.
The launch takes place in two phases. This is the first pilot phase, and digital rupees have been launched for wholesale trading, that is, wholesale trading. The Reserve Bank of India will follow up the wholesale electronic rupee pilot and conduct a similar experiment in retail this month.
In general, the above content introduces in detail what is digital rupee and what is the difference between digital rupee and cryptocurrency. I believe you will understand it after reading it. Digital Rupees are used to issue virtual currencies for government securities trading. The money will exist in virtual form like other cryptocurrencies, but the digital rupee will not be decentralized, and it will be supervised by the Reserve Bank of India (RBI).