What is it and how it is different from Bitcoin

Govt To Launch Digital Rupee What Is It And How Is It Different From Bitcoin

Finance Minister Nirmala Sitharaman announced that Reserve Bank of India (RBI) will launch a central bank digital currency (CBDC). “The introduction of Central Bank Digital Currency (CBDC) will create a huge impetus for the digital economy. Digital currencies will also lead to a more efficient and cheaper money management system. Therefore, it is suggested to introduce Digital Rupeesusing blockchain and other technologies, will be issued by the Reserve Bank of India starting from 2022-23,” said FM.

Although the central bank has previously raised questions about private virtual currencies, there have been speculations about it launching a CBDC. RBI will launch a digital Rupee in the form of CBDC. According to the government, the digital Rupee will reduce the dependence on cash and it will also reduce the payment risk.

What is CBD?

CBDC stands for central bank digital currency. This is a legal tender issued by the central bank in digital form. In a word, it’s like a flat currency just in a different form. In this case, the digital Rupee will be backed by blockchain technology. You will be able to exchange this currency through blockchain-based wallets. It will also be exchanged for government-issued currency.

What is blockchain technology?

Blockchain is a data-recording system that is virtually impossible to change, hack or cheat. It is a digital ledger of transactions that are copied and distributed to an entire network of devices on the blockchain. In a word, this technology will help you to store and trade digital currency. Since it is difficult to forge, it is also one of the safest ways to exchange digital currencies.

Digital Rupee will be different from Bitcoin or any other cryptocurrency

Although CBDC is inspired by Bitcoin, there is one big difference. While Bitcoin, Ethereum, DogeCoin and other popular cryptocurrencies rely on blockchain technology, these private coins do not have legal tender status. Although they have become popular in India, their use is still very limited. The Digital Rupee is expected to be a legal tender and will be legally accepted across the country, as the RBI will be behind it.


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