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Explained: RBI Digital Rupee | Central Bank Digital Currency (CBDC)

RBI Digital Rupee: Reserve Bank has selected a total of 9 banks for Digital Rupee to be used for large transactions from 1st November. Digital Rupee will be used for large payments and settlements.

Explained: RBI Digital Rupee | Central Bank Digital Currency (CBDC)

RBI Digital Rupee: Reserve Bank has selected a total of 9 banks for Digital Rupee to be used for large transactions from 1st November. Digital Rupee will be used for large payments and settlements.

Digital Rupee: Finally your digital currency i.e. Virtual Currency Digital RUPEE has started. It will be used in wholesale transactions from 1 November 2022. However, it has been started as a pilot project now. With the introduction of digital currency, it is also important for us to understand what it is and how it will work? Digital Rupee will no longer be in your pocket. But, in the virtual world it will be used only through you. It will not be available to keep in the pocket like a note. Won’t even print. Rather, it will work for you through technology. For example, the cryptocurrency bitcoin is used. The government will make it a completely legal tender and will also accept it. Investing in this will also be easy. The good thing is that our government, RBI will regulate it. So there will be no risk of losing money.

READ ALSO | What is Bitcoin? How to do trading in this virtual currency, know everything for your work

When will Digital Rupee come?

The Reserve Bank has selected a total of 9 banks for digital currency to be used for large transactions from November 1. Digital Rupee will be used for large payments and settlements. According to the Reserve Bank, it will be used as the settlement amount on the purchase and sale of government securities i.e. government bonds. The Reserve Bank has also said that it will also be used for retail transactions within a month.

Central Bank Digital Currency (CBDC) is the name

The Central Bank (RBI) has introduced its own digital currency to save you from the trap of cryptocurrencies. Its name is CBDC – Central Bank Digital Currency. The advantage of digital currency will be that now the circulation of cash will be less and transactions will be completed virtually. This will reduce the transaction cost. Digital Rupee will have all the features of a physical note. People will have the facility to convert digital currency into physical one. According to the plan so far, there will be no need to open a separate bank account for digital currency.

How will Digital Rupee work?

In digital form, as we see the cash in our bank account, we check our balance in the wallet. Some will be able to see and keep it in the same way. Digital Rupee will be launched in two ways. The first wholesale transaction i.e. for large transactions, which will start from November 1. At the same time, the second will be for the general public in retail. CBDC will be based on Blockchain technology. It will be legal tender like paper currency. You will be able to pay it to whomever you want to pay and it will reach his account. The CBDC will appear in the account in electronic form. CBDC can be replaced with paper note. Transaction will be easier and safer than cash. It will work exactly like cash, but the transaction will be completed through technology. In a way, it can be called electronic cash.

How will it be different from cryptocurrency?

Cryptocurrency is completely private. No one monitors it and is not controlled by any government or central bank. Such currency is illegal. But, RBI’s digital currency is fully regulated. Will have government approval. There will also be no limit on the quantity of Digital Rupee. Like bitcoin. The most important thing is that due to the regulation of RBI, there will be no possibility of money laundering, terror funding, fraud. Just as the price of currency in crypto fluctuates, nothing like this will happen in digital currency. All the features of physical notes will also be in digital currency. People will have the facility to convert digital currency into physical one.

Everyone will get digital form

Digital Rupee will be of two types. There will be a large amount for transactions whose name will be Central Bank Digital Currency Wholesale. It will be used by large financial institutions, including banks, large non-banking finance companies and other big transaction institutions. Apart from this, Central Bank Digital Currency Retail will also come for retail. People will be able to use it for everyday transactions. This will also start with select locations and banks first. People of all age groups will be included in the retail project. Then based on their experiences, the features will be changed if needed.

Digital currency will be like notes

Digital Rupee will also be linked to UPI, an important link in the digital payment system. With this people can transact with other important wallets like Paytm, PhonePe. Just like there are 10, 20, 50, 100, 500 notes. Digital Rupee with the same value (denomination) will also come. However, there can also be a limit to the amount of digital currency a person can hold. Efforts will be made to maintain confidentiality on payments with digital currency. It is possible that barring select government agencies, no one else may be given complete information about transactions done in digital form.

Features of Digital RUPEE

– CBDC will be the digital token of the country.
– The work of money transactions in business will become easy.
– There will be no hassle of transaction from check, bank account.
– Money will be transferred from mobile in few seconds.
– Will get rid of the problem of fake currency.
– The cost of printing paper notes will be saved.
– Digital currency will always be there after it is issued.
– CBDC cannot be damaged.

currency notes will not expire

Digital Rupee is not coming to end the system of existing currency notes. Rather, it will give people another option in the transaction. Both the currency note system and the digital currency system will work. This will give a boost to cashless economy. Digital Rupee will be brought in such a way that it can be paid without internet. The purpose will also be that such people who do not have a bank account can also use it.

READ ALSO | How To Invest In Bitcoin | What is bitcoin? | Bitcoin kya hai 

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