Cryptocurrency and news related to crypto are just in the air. You get to hear so much different news about it every single day. Many countries are trying to ban the usage of cryptocurrency, while some of them are making it a legal tender. India is one of those countries which did not show any interest in cryptocurrencies. But they have recently announced the launch of the digital rupee.
On 1st February 2022, Finance Minister Nirmala Sitharaman has announced the launch of a digital rupee in the next financial year. Along with that she also announced that the income earned through crypto trading will be taxable. That means, there is something positive that the government is going to do about cryptocurrencies.
But is digital and cryptocurrency the same?? How are they different this is something everyone needs to understand before the digital rupee is launched. That will help you in investing in a better way. So, here we have discussed some important points about Digital Rupee and Cryptocurrency.
What is our Digital Rupee?
CBDC or Central Bank Digital Currency is the Digital Rupee. Nirmala Sitharaman says that it is going to boost the digital economy of India. It is going to be a cheaper way for currency management in India.
Along with the announcement of tax for cryptocurrencies, she also announced a digital rupee. Now the confusing factor here is will digital currency also be taxed? The answer is NO. Cryptocurrency is a digital asset, but the digital rupee is the same fiat currency in digital form. This digital rupee is issued by the government of India and hence it is a safer way to transact.
During the pandemic situation, people got used to digital wallets. The same wallets can be used for storing both digital rupees and also cryptocurrencies.
Differences between Digital Rupee and Cryptocurrencies:
There are many differences between digital rupee and cryptocurrencies. When you understand each of them individually, you will gain only a little knowledge about them. But when you compare them and try to understand their differences, you will be able to understand them better.
- The first difference is digital currency is present in electronic form and it is the same fiat currency that you use. You can use them for contactless transactions. But when it comes to cryptocurrency, it is a store of value and is available in encrypted form.
- Cryptocurrency is not regulated by any central bank or government body. It is a decentralized currency. But Digital Rupee is issued by the Reserve Bank of India and they regulate it.
- When it comes to stability, the digital rupee is highly stable. This currency is like fiat currency and hence accepted worldwide. Cryptocurrency is a highly volatile currency and there is no global acceptability of the currency.
- Another major difference between the digital rupee and cryptocurrency is who can monitor the transactions. When you make any transaction with the digital rupee, you, your bank, and the receiver will be aware of the transaction. But with cryptocurrency, it is accessible on the decentralized ledger and is available publicly.
- Cryptocurrencies are available in encrypted form and are highly secured. But when it comes to the digital rupee, you will have to set your password. Make sure that the password is strong enough that nobody hacks it. It will help in protecting credit cards, debit cards, all banking apps, and digital wallets as well.
In simple words, the digital rupee is available only in fiat currency. As they are governed by the central bank, it gets easy for you to trust it and adopt it. Security is all that anyone needs because they invest their hard-earned money into them. If the wallets are not secured, then the chances of losing money are high.
If we have to learn more about the digital rupee, then we need to wait for the launch of the digital rupee in the next financial year. We will be able to understand it better when we start using it. There may be many ideas behind the launch of the digital rupee in India and we need to wait to know more. But if you want to buy and sell cryptocurrencies you need to open a free trading account on crypto comeback pro or any other trusted trading platform.