Digital Rupee: With the e-CNY project, China began testing the yuan in digital currency in 2020. 200 digital yuan have been given free to people in major cities there, who were asked to spend in 14 days. The Chinese government told the shopkeepers to treat it like a currency note. The test was successful. Today all apps are accepting this digital yuan called Renminbi. China can put it in front of the world at the Beijing Olympics.
The government of India will take a similar initiative in India this year. The announcement of the introduction of Central Bank Digital Currency (CBDC) in the general budget is its beginning. This will not change the traditional way of transaction but also bring transparency in the industries. It is the responsibility of the RBI to start it from the new financial year. We will use this digital currency along with the traditional rupee. This digital currency is similar to any conventional note or coin. The only difference is that its existence is digital or virtual. RBI will issue it, so its credibility will remain the same.
Testing not only in India-China but all over the world
- 60 percent of the countries are building frameworks for technical testing of digital currency.
- 86% of central banks are considering bringing digital currency to various countries.
- In 14% of countries, governments gave digital currencies to citizens as a pilot project or in some other form.
- Sweden has started testing the digital krona, while the Bahamas has given digital sand dollars to citizens.
What are the benefits of the Digital Rupee or currency?
Advantages for Government from Digital Rupee: Today, it is a big challenge for the government to print, operate, handle, and ensure the security of physical notes. CBDC will not only get rid of these problems but, will also reduce the cost of maintaining the currency. If the government has information about every rupee transaction, then the government can curb black money and corruption.
Common people: Worrying about the security of cash will be relieved. Those who do not have bank accounts will also join the banking system. Apps and fintech companies can also offer customers the to hold digital currency and transact on their platform.
Country: 90% of international trade happens in US dollars. China wants to break this supremacy with the Renminbi. The time is right for India to present the Digital Rupee on the global stage with strong and credible confidence.
Difference between the digital Rupee and cryptocurrency
Digital currency
- A centralized system controls Digital Currency. That is, the government or RBI will control the digital Currency.
- A legal framework is also created for this.
- Their transactions remain secret. When and how much money one person gave to another, there is no need to show this information in a public forum. However, the government keeps an eye on it.
- It is not encrypted.
Cryptocurrency
- It operates in a completely decentralized system. There is no control of any country, government, or bank.
- It does not come under any legal framework.
- Here the account of the transaction remains public on the virtual platform. Anyone can see it like bitcoin.
- It is fully encrypted.
Dangers in having a digital currency
The biggest threat to digital money is digital fraud or cybercrime. It can be kept safe only with a solid system. It will also be a challenge to make citizens aware of its use to protect them from cyber thugs.
Digital money will reduce the risk of losing money for home buyers
Real estate traders and developers say a digital rupee will help increase transparency in the sector. The risk of losing money to the buyers of houses or other properties will be reduced.
Developers Association NAREDCO (National Real Estate Development Council) says that with the help of RBI’s digital currency coming with the help of blockchain technology, it will be easier for the industry to operate. This will not only help the industry in increasing its momentum but will also serve to increase the trust among the customers.
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