What are the importance of Digital Currency in India?
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What is Digital Currency:-

Digital currency in India is a form of currency that is available only in digital form or electronic form. It is called digital money, electronic money, electronic currency, or cybercash. 


It does not have any physical attributes and it is available only in the form of digital. In the digital currency the transcations are made using of computers or the electronic wallets, which is connected to the Internet. 

What are the importance of Digital Currency in India?
India's Central Bank -Reserve Bank Of India publish -Digital currency in Nov1,2022.

Three Types of Digital currency:-

1. What is Cryptocurrency:- 

Cryptocurrency is digital money which is worked on the blockchain technology and secured by cryptography. First understand three terminologies-Blockchain, decentralization, and cryptography. To understand the Cryptocurrency.


Cryptocurrency is unregulated in India. In the Budget, 2022 the Government of India announced a flat 30% tax on gains from the cryptocurrency transaction as well as a tax deducted source( TDS)of 1%.


2. What is Stablecoins:- 


Stablecoins are cryptocurrencies that attempt to [eg their market value to some external reference. Stablecoins are more useful than move–volatile cryptocurrency as a medium of exchange. Stablecoins may be pegged to a currency like the U.S dollar or the price of a commodity such as Gold.


Stablecoin backed by Coinbase, It is the world’s biggest bitcoin broker and largest exchange holder of bitcoin. There is no explicit law to regulate stablecoins in India yet. The Reserve Bank of India (RBI) raised concerns about stablecoins in December 2021.


3. What is Central Bank Digital Currency (CBDC):-


Reserve bank of India defines CBDC as the legal tender issued by a central bank in a digital form. It is just like as a sovereign currency and is exchangeable one-to-one (1:1) .


While money in digital form, which is predominant in India. In bank accounts recorded as book entries on commercial bank ledgers –a CBDC would differ from existing digital money available to the public, because a CBDC would be a liability of the Reserve Bank and not a commercial bank.


The Reserve Bank of India (RBI) was introduced on November 1, 2022 “Digital Rupee”.In the beginning, the Digital rupee was introduced in Wholesale businesses in the current financial year.


How will RBI’s CBDC Digital Rupee work:-


The Reserve Bank of India (RBI) is all set to commence the pilot project of India’s digital currency-“DIGITAL RUPEE” for the wholesale segment from November 1, 2022. 


The use of this pilot project is the settlement of secondary market transactions in government securities.RBI has identified nine banks including the state bank of India(SBI), Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahendra Bank, Yes Bank IDFC First Bank & HSBC to participate in this pilot project of wholesale “ Digital Rupee”.


Financial experts believe that CBDC is one of the biggest developments in the financial world. The full impact of this Digital currency will be visible in near future.

India already as an early adopter of UPI technology .With  this rapid adoption of UPI and QR Based payments across the country. With, it is expected that India will take giant strides in the world rapidly progressing toward the adoption of digital currencies

What are the importance of Digital Currency in India?

Ten Important features of Digital Currency–Retail Segment:- 

(1). RBI has not yet launched a CDBC Digital Rupee pilot for their Retail segment. The Central Bank of India will launch the first pilot of the Digital Rupee for the retail segment very shortly. It will be launched for closed user groups comprising customers and merchants.RBI will share detailed guidelines very soon.


(2). CDBC can also be used for retail payments. The Retal payments are made available for payment transactions to be made via CBDC. Retail CBDC distributed by the RBI and commercial banks would have been in electronic wallets/accounts by the end users. 


The Digital Rupee would enable payment means between the following methods.


  • Consumer to consumer
  • Consumer to Business
  • Business to Business


(3). CBDCs can play a big role in the government’s push to provide a safe and reliable means of payment for direct benefit transfer programs of government welfare programs.


(4). Digital Rupee in India  will  play a big role in providing a safe and reliable means of payment for direct transfer programs of government welfare programs.CBDC will help promote inclusive and innovative payments according to experts.


With Digital Rupee, efficiency, lower fee requirements, faster settlements, increased transparency, and lower privacy would translate to everyday lives.


(5). The CBDC is taken to sovereign paper currency but takes a different form, exchangeable at par with the existing currency, and shall be accepted as a medium of payment, legal tender, and safe store value. The CBDC shall appear as a liability on a central bank’s Balance sheet.


(6). The retail CBDC is intended for the settlement of interbank transfers and related wholesale transactions, the retail CBDC is an electronic version of cash primarily meant for retail transactions.


(7). Under the direct model, the central bank will be responsible for managing all the aspects of the CBDC system, such as issuance, account keeping, and transaction verification.


Under the Indirect model, the central bank and other intermediaries (bank and any other service providers) each shall play their respective roles. 


Under this model, the central bank will issue the CBDC to consumers indirectly through intermediaries, and any claim by consumers is managed by the intermediary because the central bank will only wholesale payments to intermediaries.


(8). CBDC in India includes a reduction in operational costs involved in physical cash management, efficiency and innovation in the payment system, boosting innovation in cross-border payment space.


(9). The use of offline features in CBDC would also be beneficial in remote locations and offer availability and resilience benefits when electric power or a mobile network is not available.


(10). The payment system is available 24×7,365 days a year to both retail and wholesale customers, they are largely real-time. The cost of transactions is perhaps the lowest in the world.


It reduces the operational costs and costs related to printing, storage, transportation, and replacement of banknotes.

What are the importance of Digital Currency in India?
Bitcoins in India
The common difference betweenDigitaCurrency&Cryptocurrency:-
 Digital Currency: – Digital currency is the digital format of the flat currency that you carry around in your wallet or withdraws from an ATM. 


It is the same currency that is backed by an authority, the Reserve Bank of India. The Indian currency can be exchanged for actual currency.  The Digital currency is launched on 1 November 2022 by Govt. of India.


Cryptocurrency: – This currency is not backed by a central figure but derives its purchasing power from its community of users. Technically they are pieces of code created by “mining” that are managed through a digital ledger called a blockchain.


To ensure transparency at each stage of the journey. These coins are not utilized outside of blockchain as these are digital assets that can be traded but not used as legal tender in India


What is Digital Currency in India? How does Digital currency work in India?


1. Question:-Is India launching digital currency?

1. Answer:-Government of India announced the launch of the Digital Rupee –a Central Bank Digital Currency on November 1, 2022, on the Whole, sale segment.

2. Question:-What is New Digital Rupees?

2.Answer:-Digital rupee(e Rs.), also known as Central Bank Digital Currency(CBDC) is a digital form of currency notes issued by the central bank, Reserve Bank of India.



 3. Question:-How will the Digital rupee work in the Wholesale segment?

3. Answer:-Digital rupee will be used for large payments and settlements. According to RBI, it will be used as the settlement amount on the purchase and sale of government securities (i.e) Government bonds.


4. Question:-Which country is launching digital currency?

4. Answer:-China became the World’s first major economy to pilot a digital currency in April 2020. The People’s Bank of China is aiming for widespread domestic use of the e-CYN in 2022.


5. Question:-Has the U.S launched a central bank digital Currency?

5. Answer:-The United States central bank digital currency (CBDC) would be a digital form of the U.S dollar. U.S has not yet decided to neither launch nor it pursue a CBDC.


6. Question:-Which central bank digital currency first started in the world?

6. Answer:-In October, 2020, first the central bank of Bahamas issued the Sand Dollar. It was the world’s first CBDC that covered an entire country. In October 2021, Nigeria became the first African country to establish CBDC in the world.


7. Question:-What is the most promising cryptocurrency for 2022?

7. Answer:-The top of the list consists of Tamadoge, Battle Infinity, and Lucky Block-three projects that have been the crypto world by storm and made the list of the best of 2022.


8. Question:-How much is a bitcoin per person?

8. Answer:-There is only 21 million bitcoins meant to go into circulation. Taking the current world population of 7.8 billion, this would put the number 0.0027bitcoins going to each person.



9. Question:-How Many Bitcoins exist in the world?

9. Answer:- There is a total of 19,198,706.25 Bitcoins circulated in the world.


10. Question:- What is Digital Rupee by RBI?

10. Answer:-The Digital Rupee or CBDC is the RBI’s newest foray into a digital form of physical note currency. It was issued by the Reserve Bank of India on November 1, 2022.




Digital currency will give a big boost to the Indian digital economy. Digital currency will also lead more efficient and cheaper currency management system.


The digital currency has the potential to completely change how society thinks about money. The rise of Bitcoin, Ethereum, and thousands of other cryptocurrencies that exist only in electronic form has led global banks to research how national digital currencies might work.


The digital payment system is available 24*7*365.UPI is agnostic to the type of 

User and it is used for person-to-person, person-to-business, business-to-person, and business-to-business transactions for transcations.

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I am Ajay Kumar Patra. ( M.com & MBA-Finance) with 27years of Accounts & Taxation Experience in Large Manufacturing Units in India. In 2021 I started my own tax consultancy firm called “Ajay Tax consultant”. I started my Digital marketing on my website "www.odiyadigitalworld.com".I have already published more than 100 Blogs on Business, Finance, startups, Digital marketing & Tours & Travel for my viewers.

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