Finance Minister Nirmala Sitharaman during her Union Budget 2022 speech made some major announcements related to cryptocurrencies, especially the new tax on crypto earnings. As most people were eager to see if cryptocurrency makes its mark, the government seems to have gone in another direction by announcing its own Digital Rupee currency that will be available later this year. Calling it the Central Bank Digital Currency (CBDC), the announcement says Digital Rupee will give “a boost to the digital economy". So, what is the Digital Rupee, how does it work and is it any different from cryptocurrency like Bitcoin? We’ve got all this covered to make things easier for you to understand.
WHAT IS DIGITAL RUPEE
Digital Rupee is basically the digital form of regular currency that we use for daily transactions. You can store the money digitally, in a secured format. Digital Rupee is powered by blockchain technology which makes currency management cheaper, allowing the Government to print less notes in the future. And since the currency operates digitally, its lifespan increases, as you cannot destroy digital forms, or lose it for that matter.
WATCH VIDEO: Xiaomi 11i HyperCharge Smartphone Review: Reliable All-rounder With 120W SUPER FAST Charging
HOW WILL DIGITAL RUPEE WORK
Even though Digital Rupee will be powered by blockchain technology, it will be governed and monitored by the Central body, which prevents volatility in the currency owing to different reasons. And since Digital Rupee is just another form of fiat currency, it is likely to catapult digital payments to a new level. We still don’t know how the Government plans to put Digital Rupee into the system.
Watch Video: NoiseFit Evolve 2 Review: Good Smartwatch Under Rs 5,000
IS DIGITAL RUPEE DIFFERENT FROM CRYPTOCURRENCIES LIKE BITCOIN
Digital Rupee has all the blueprints of a cryptocurrency. It is based on blockchain technology, and strives to reduce dependence on physical currency for the future. However, unlike Bitcoin which operates in a decentralised environment, where all the data is stored in a wide network of computers. Cryptocurrency like Bitcoin are built on that premise. But when it comes to Digital Rupee, the controlling position lies with the Reserve Bank of India (RBI) which will set up its own network with other banking entities. Thus, limiting the network reach of Digital Rupee to local bodies and institutions.
We will know more about Digital Rupee as and when the Government divulges more details, which is going to happen before the end of FY 2022-23.
Read all the Latest Tech News here
Comments
0 comment