What is Digital Rupee India?
What is Digital Rupee India: Heartiest congratulations to RBI and the Government of India for putting their incredible footprints in the history of the Digital Rupee or currency from 1st November 2022. India is among the very few countries that boast of the Digital Rupee or currency.
RBI has initiated this pilot project from 1st November 2022 for the wholesale market first, for the trial purpose by including 9 Banks into this Digital Rupee basket. On the very first day, it banged on and witnessed transactions of a whopping amount of ₹275 Crores.
Also, within a few days, Digital Rupee will be open for transactions for retail customers as well. RBI is very much hopeful about its huge success in the retail market as well. This will certainly boost the Indian Digital economy to a great extent.
What is RBI Digital Rupee India?
One should know that Digital Rupee is not like cryptocurrency(Bitcoin) or any other digital payment alternatives. It is purely a digital currency like our Indian Rupee notes but kept virtually.
It is also called Central Bank Digital Currency or CBDC. The best-suited term shall be “E Rupee”, “Digital Rupee” or “Digital Notes” in our Indian parlance which does not have tangibility. I mean one can not touch it but see it in digital accounts or wallets.
RBI Digital Rupee is a digital currency kept in digital form/virtually using the most popular Blockchain Technology. This blockchain technology is used behind the most popular Bitcoin and other Cryptocurrencies.
In simple terms, it is like an electronic Rupee Note. It is completely different from money kept in your Bank account and cryptocurrency.
RBI Digital Rupee can be explained as you are holding your purse/wallet in e forms in Digital Rupee. From where you execute any kind of transactions using your digital currency or digital bank notes. Most advantageously you don’t have to worry about pickpocketing your wallet or losing your hard-earned money.
Yes, RBI is very much optimistic that it will replace our physical wallets within a few years completely once people understand the importance of the RBI Digital Rupee and get used to it. It will reduce both transaction time and costs for banks.
How Digital Rupee RBI helps you?
Once it is open for general people, we can use RBI Digital Rupee for any purpose or transaction like we use our Bank notes. It can be used for making online or offline payments, payments to e-commerce merchants, payments to Banks, money transfers to any person and many more.
Therefore, we would be able to see in a few months that instead of using cash for making payments for various transactions, customers would like to use RBI Digital Rupee instead of cash.
This would enable Government to move forward one step towards a cashless economy like other developed nations. Very likely this would help us to reduce our exuberant dependence towards cash.
How can I buy Digital Rupee RBI?
Once it is open for retail customers by next month, we have to wait for RBI’s detailed guidelines regarding buying Digital Rupee. But as of now, it is open only for the wholesale markets or more specifically the specified 9 banks which can execute transactions among them using this digital currency.
Therefore, as of now, we are not allowed to buy RBI Digital Rupee directly. We have to wait for a few more days till it is opened by RBI for all retail customers in the secondary market.
You can read the following popular articles below-
Can Digital Rupee RBI Trade?
Yes, of course, Digital Rupee can trade. Like physical rupee notes, it is also exchangeable with others. RBI Digital Rupee is capable of doing everything that a physical rupee note is capable of doing.
Also, one of the most advantageous benefits of using this digital currency is that it will be considered as a legal tender where cash is not allowed for any transactions.
Is Digital Rupee a Cryptocurrency?
The answer is certainly not. This is an Indian Rupee Digital Currency. Digital Rupee is completely different from Cryptocurrency. In India, cryptocurrency is still not a legal tender and it is not controlled centrally. Though both use the same blockchain technology.
Now let’s see how Digital Rupee India is different from Cryptocurrency.
Digital Rupee India
- It is a legal tender in India is a Central Bank Digital Currency(CBDC) of RBI
- It is a centralised currency
- It is the other version of Rupee note that can replace physical note or currency
- It reduces both transaction time and cost
- It enhances transparency, reliability and efficiency
- It is not risky alike bank notes
- It does not attract any tax
- It uses blockchain technology
- It is not yet a legal tender in India
- It is not controlled and regulated by RBI
- It is a decentralised currency
- It is not the opposite of physical currency
- It is an alternative payment method
- It is not cost-effective alternatives
- It is not transparent and efficient
- High risk is associated with cryptocurrency
- It is not like physical currency
- It attracts 30% tax for capital gains
- Both uses blockchain technology
So, you can see from the above table that CBDC Digital Rupee is completely different from Cryptocurrency in many ways. Most importantly RBI Digital Rupee is based on a centralised mechanism, unlike cryptocurrency which is deregulated and uncontrolled.
Some FAQs on What is Digital Rupee RBI?
Now, lets check some FAQs for easy understanding.
What is RBI Digital Rupee and how it works?
As I mentioned earlier, Digital Rupee is a virtual Rupee that replaces the requirements of physical INR notes. You can do anything with this virtual currency that you can do with your physical notes. Instead of paying in cash, we can use this e-rupee for payments very easily from our digital wallets.
Using this digital currency would enable Indian customers to make cross-border transactions faster and more efficiently. The transaction gets effected immediately and the ledger balance gets settled instantaneously.
RBI Digital Rupee brings more transparency to the whole ecosystem and enhances credibility for retail customers. It minimises transaction costs and time.
If it becomes popular in the coming years, there is a possibility that RBI would reduce the production of its physical notes surpassed by a great margin. It will bring down the average cost of Rupee note production and the benefits of lower costs will be extended to the common citizens of India.
Can we invest in Digital Rupee?
Of course, we can invest using this RBI Digital Rupee in any instrument. This is just a digital currency and we can use this for making various investment such as FDs, RDs, Bonds and etc.
What is Digital Rupee SBI?
State Bank of India is not authorised to issue any Digital Rupee. SBI is amongst the 8 other banks entitled to the pilot project of digital currency as introduced by RBI.
What are the features of Digital Rupee RBI?
- RBI Digital Rupee is a Digital currency kept virtually
- You can do anything what you can do with physical notes
- It is like our physical INR(₹)notes
- It is called E Rupee, Digital Notes or Digital Rupee
- It is a legal tender in India
- It is completely different from Cryptocurrency
- It reduces our transaction time and cost
- It will be open for retail customers very soon