Digital Currency: Government is bringing digital currency soon, know how to do transactions, will it be different from UPI, know full details

Digital Currency: Government is bringing digital currency soon, know how to do transactions, will it be different from UPI, know full details

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new Delhi. The government may soon introduce digital currency. RBI is busy with its preparations. Finance Minister Nirmala Sitharaman had announced the introduction of digital currency in Budget 2022. While presenting the budget, he had said that the central bank will launch a digital currency i.e. Digital Rupee in 2022-23.

Its name will be Central Bank Digital Currency. People associated with the matter say that RBI can launch this digital currency at the beginning of the new financial year. The new currency will be based on Blockchain Technology. When the country has its own digital currency, then people will be able to buy from it.

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Digital currency to replace UPI
Right now people use UPI (Unified Payment Interface-UPI) for shopping or any other transaction. Now people will be able to transact with digital currency instead. However, the picture on where it will be used is not clear yet. But, the biggest question is how will it work and how will it be different from UPI.

currency,Can pay instead of cash
Mihir Gandhi, Partner & Payments Transformation Leader, PwC India says that digital currency itself will be the underlying payment mode. It can be used for digital payment against currency/cash. It is expected that payments with Digital Rupee may be there to ensure smooth transactions. Presently UPI payments are done using the digital equivalent of existing currency notes. This means that every rupee transferred through UPI is denominated in physical currency.

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Not different from normal Rs.
The digital currency is no different from the normal rupee. It can be used for general transactions like NEFT, UPI. In case of UPI, the digital currency will be handled by RBI and not through bank intermediaries where each bank has a separate UPI handler. UPI payments currently depend on the settlement of banks transacting with RBI. The digital currency will transact directly with the RBI, so it will be settled immediately.

will appear in the account in electronic form
Digital currency will actually be a currency based on other technologies including blockchain. It will work just like currency. It can also be exchanged with currency notes. It will be reflected in your account in electronic form.

Tags: currency, RBI, Upi

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