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Digital Rupees: know more about eRs-R; how it is different from cryptocurrency? details here

Digital rupees (eRs-R): The Reserve Bank of India (RBI) started a digital rupee experiment in four cities. The goal of digital currency is to gradually phase out paper money. It has nothing to do with Bitcoin or Blockchain technology. Here are descriptions to make you understand better about digital rupee and crypto currency. WHAT IS […]

Edited By : Divya Richa | Dec 2, 2022 10:00 IST
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Digital rupees (eRs-R): The Reserve Bank of India (RBI) started a digital rupee experiment in four cities. The goal of digital currency is to gradually phase out paper money. It has nothing to do with Bitcoin or Blockchain technology. Here are descriptions to make you understand better about digital rupee and crypto currency.

WHAT IS THE DIFFERENCE BETWEEN DIGITAL RUPEE AND CRYPTOCURRENCY?

The digital rupee and cryptocurrency are not the same thing and have nothing to do with one another. While cryptocurrency is built on blockchain, digital Rupee is not. The newly released digital rupee is known as Central Bank Digital Currency (CBDC), and its major goal is to eventually eliminate cash money from the market.

Another difference between crypto and digital rupee is the value factor. Cryptocurrency is a risky market, and its value fluctuates according on market conditions. This isn’t the case with digital rupees. Its worth remains constant over time, much like cash money.

The sole distinction is that digital Rupee is a “digital” representation of paper money, as the name implies. Surprisingly, the value of digital Rupee and paper money is the same; the difference is that handling digital Rupee is far easier and less expensive.

DIGITAL RUPEE LAUNCHED IN THESE CITIES

The Indian central bank has begun testing digital rupees in four cities: Mumbai, New Delhi, Bengaluru, and Bhubaneswar. The RBI collaborated with four banks for the initial testing: State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank.

When the testing phase begins, the RBI will expand the cooperation to include four more banks: Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank. In the coming days, the service will be expanded to new cities. Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla are among the cities that would have access to digital rupees in the second phase.

First published on: Dec 02, 2022 10:00 AM IST
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