What Is Digital Rupee? How Is It Different From Cryptocurrency?

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In her speech during the Union Budget 2022, Finance Minister Nirmala Sitharaman announced that the RBI (Reserve Bank of India) will launch its own digital rupee in the fiscal year 2022-23. It is a central bank digital currency, she added. It is touted to provide a significant boost to the digital economy, thereby leading to a more efficient and cheaper currency management system.

 
What Is Digital Rupee? How Is It Different From Cryptocurrency?

What is Digital Rupee?

Digital Rupee is a digital form of regular currency, which is used for everyday transactions. In this, money can be stored digitally securely. It is powered by blockchain technology, which makes currency management simpler and cheaper, thereby letting the Government print relatively lesser notes in the future. Since this currency operates digitally, its lifespan also increases. It is not possible to destroy the digital form of money or lose it.

Given that it is powered by blockchain technology, the digital rupee is governed and monitored by the Central body. As it is another form of currency, it is likely to take digital payments to the next level. We are yet to see how the government plans to put this new form of currency into the system. Notably, it is a safe, robust, and convenient alternative to the regular, physical cash that we use.

Is RBI Digital Currency Like Bitcoin?

Well, if you want to know the difference between digital currency and cryptocurrency, then you will get to know further details here.

Digital rupee is a digital form of the regular currency but a private, virtual form of currency. It has also the blueprints of a cryptocurrency but it operates in a different way. Unlike Bitcoin, which operates in a decentralized environment, wherein all data is stored in a wide network of computers and cryptocurrency that is built on the same premise, the digital rupee's controlling position lies within RBI, which will set its own network with baning entities.

 

It was announced that the introduction of digital currency has the potential to provide significant benefits including reduced dependency on cash, lower transaction costs, and reduced settlement risk.

Given that the digital rupee will be launched in the fiscal year 2022-23, we can get further details regarding the same in the coming months.

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