Recently, State Bank of India (SBI) also added Digital Rupee in its service. Apart from government banks, many private banks are providing the facility of digital rupee to their customers. Let us know about digital rupee and how it works.
Digital Rupee: The Indian Central Bank RBI has started Digital Rupee. Many big banks of the country have started the facility of transactions in digital Rupee. India’s Central Bank Digital Currency i.e. CBDC is also known as Digital Rupee or e-Rupi.
What is Digital Currency?
Now understand the Digital Currency of RBI as Digital Rupee. The Reserve Bank mints coins and prints notes, similarly the RBI creates the digital rupee token. Just as coins and notes are delivered to the market and people through commercial banks, similarly banks also deliver tokens i.e. digital rupees to the people. Those to whom the Reserve Bank issues tokens are called token service providers. These are called the banks selected by the RBI.
What is Digital Rupee?
Digital currency is a currency which is completely electronic. Their most special thing is that their transactions are completely virtual. Currently, there are mainly three types of digital currency: Cryptocurrency, Central Bank Digital Currency (CBDC) and Stable Coin. Central Bank Digital Currency can be understood as Digital Rupee or E-Rupee.
What is the value of digital rupee?
All the banks which have been selected by RBI for digital rupee, has provided users with the facility of app and wallet for digital rupees. You can store your digital rupees on CBDC-R app. It is just like you keep money in your bank account and it is visible in your bank’s app. Its working method is like any common digital wallet.
How Digital Rupee work?
The value of digital rupee is equal to the value of notes and coins. For example: If the bank has given you 20 digital rupees, then its value is equal to 20 rupee notes or coins. You can use digital rupee instead of cash. Now, like UPI, the facility of scan and pay has also become available. Transaction of digital rupee has also become possible through UPI.
5 Benefits of digital rupee
1. Low cost of transaction
When you make payment through credit card or debit card, sometimes you have to make extra payment. If the transaction is global then the cost becomes higher. In the case of digital currency, the cost remains very nominal.
2. Available 24 hours
To withdraw cash, you need to go to ATM or bank branch. You may have money in your account, but you do not always have cash with you. Digital currency is different in this matter, which is available 24 hours a day.
3. Ease for customers
Be it coins or notes, they have a limited lifespan. Notes can burst or melt in water. Problems may arise with coins also. In the case of digital currency, there will be no such problems.
4. Easy maintenance
If you are an end user, then you also have many benefits from it. As mentioned above, you have 24/7 availability. You do not have the fear of losing money. Digital currency cannot be lost or someone can steal it from your pocket.
5. Less cost of making
Whatever notes or coins you use, the Reserve Bank has to pay huge fees for their manufacturing. For this, the Reserve Bank has set up printing presses and mints at many places. This is not needed in digital currency. It is possible to issue it at very low cost.
Yes. You need to link Bank Account and authenticate using your Debit Card details to register for the Digital Rupee app.
The Reserve Bank of India.