With India working to adopt a digital currency soon, here is what it truly means, and how it differs from the many cryptocurrencies we see around us today.
Digital Rupee or Central Bank Digital Currency (CBDC) will be the next attempt by the RBI to boost India’s digital economy. Presented at the Union Budget 2022-23 by Finance Minister Nirmala Sitharaman, the concept of the Digital Rupee is meant to take some inspiration from cryptocurrencies like Bitcoin, but with the regulations of the central bank. Digital Rupee or CBDC will work „using blockchain and other technologies,“ the Finance Minister said during the budget presentation. So that is one aspect that all the cryptocurrencies share with the upcoming digital currency of India. The other is the problem it means to solve – India’s digital currency will „lead to a more efficient and cheaper currency management system,“ the minister highlighted. With such benefits leading to projected growth in India’s digital economy, the budget plans for 2022-23 mention the launch of the Digital Rupee, issued by the Reserve Bank of India. This last bit of information seems to be the only big difference between the CBDC and Bitcoin or some other cryptocurrency, even though their purpose of existence might be the same. Here is a look at this in detail. The Reserve Bank of India (RBI) defines Central Bank Digital Currency (CBDC) as a legal tender issued by a central bank in a digital form.
