Concept of Digital rupee: The Reserve Bank of India (RBI) has begun the pilot phase of its ambitious digital rupee project. The project has only been launched in a few cities, with only eight banks participating: ICICI, SBI, ICIC, Yes Bank, IDFC, Bob, Kotak, Union Bank of India, and HDFC.
It is important to clear the concept of digital rupee. The digital rupee cannot be purchased. It is a separate currency. Have you ever bought currency notes, for example? No. The notes are obtained in exchange for goods and services. You exchange this money for goods and services.
Aim of digital rupee
The RBI’s digital rupee aims to completely replace paper and metal money. This will be electronic money that can be sent and received via mobile and computer-based devices. These types of transactions would not even necessitate the use of the internet. The RBI has not yet released the digital currency’s modalities.
Digital money can be used for both personal and commercial transactions.
What is the money’s purpose?
The RBI spends a lot of money on coin minting and currency note printing. These notes and coins, too, require a large sum of money to be distributed. Furthermore, these coins and notes can become damaged and must be replaced on a regular basis.
Most of these issues will be resolved automatically with the use of digital currency.
Digital money can also aid in the prevention of financial fraud.
How will Digital rupee work?
Digital money can be used with digital wallets, mobile phones, and other devices. Digital money will be issued in the same denominations as traditional money.
A UPI Id and QR code are required to use digital money. You must be a part of the digital ecosystem.
There will be no interest paid on cash stored in these wallets. This is similar to traditional currency, but in digital form. If you don’t care about keeping money in your pocket, you won’t care about digital money.