Digital Rupee is new way of online transaction without Bank

A new way of online transaction without Bank Account – Digital Rupee

What is Digital Rupee?

• Reserve Bank of India launched Digital rupee and it is considered as a mean to implement monetary policies to provide control growth, stability & influence inflation.
• Digital Rupee is a Centrally Backed Digital Currency (CBDC) which is like regular currency notes issued by Reserve Bank of India but in electronic form. It is backed by most secured Blockchain technology  and the faith and credit of Reserve Bank of India.
• The Digital Rupee objective at replacing traditional currency notes and can be used for making and receiving payments via QR codes(a machine-scannable image that can instantly be read using a Smartphone camera) or Via Digital Rupee wallets. Currently it is launched in wholesale format between Banks, later it will be available in retail format with all account holders across banks.

What are the special features of Digital Rupee?

The Basic features of Digital Rupee are as below mentioned:

• Only one Digital Rupee wallet can be linked to a Mobile No.
• No bank Account is required to transact Digital Currency.
• Digital Rupee can be transacted without the use of Internet.
• The Digital Currency is just like normal currency and no interest will be paid for keeping Digital Currency in the e-wallet.
• Digital currency is not like Blockchain technology or cryptocurrency the value of Digital Currency does not fluctuate it remains constant over the period of time.

How is Digital Rupee different from Cryptocurrency?

• For Example:  If you want to buy any vegetable or fruits from the market then you can make the payment via Digital Rupee as a medium of exchange but we cannot use Blockchain technology or Cryptocurrencies to make the payment of the same.
• digital currency or Cryptocurrencies are based on blockchain technology where each transaction is publicly recorded for anyone to see, whereas digital rupee is also based on Blockchain technology, but transactions will not be publicly available, However Reserve Bank of India will be able to track to the transactions which are taking place via digital Currency.

What will be impact of Digital Rupee on the economy in the future?

• In future the Govt of India may try to regulate several sectors by making Digital rupee as an only medium of exchange in the specific sector.
• For example : Govt of India may ask the citizens to transact with govt for making payment of Taxes , water bills , Electricity bills with the help of digital rupee. With the introduction of Digital Rupee ATM(Automated Teller Machine) may also become redundant.

What is the impact of digital currency on accounting and taxation?

• Digital Rupee will bring transparency in the economy which in turn will help in increasing the tax collection to the Govt of India. Also with new currency being introduced accountants and Chartered Accountants have to perform extra steps & measures to record transactions taking place Via Digital Rupee.

What is the motive of Govt of India behind Digital Rupee?

The motive of Govt of India is as follows:

• It is easy to keep track of receipts and
• Digital Rupee is more secured than carrying physical
• Hassle free & Smooth transactions could take place at no

What should one learn from this?

• By bringing Digital Rupee the Govt of India is trying to move towards digitalization and trying to minimize the cash transactions. Digital Rupee will help Govt of India monitor the high valued transactions and bring transparency in the money market.
• There are some threats such as centralised data maybe used by someone for other motives and there is lack connectivity in rural areas which may require some time to be developed. Lets see what’s there in upcoming Union Budget 2023 on Digital Currency usage.

 

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