E-rupee | The Official Cryptocurrency

E Rupee

What is e-Rupee?

  • The CBDC will operate on a "token-based" currency, according to which whoever is in possession of the token is assumed to be the owner of the CBDC.
  • The introduction of the e-Rupee won't eliminate the paper money that we already use for transactions; it will hold the same value and be interchangeable with paper money.
  • It must be recognized as a valid form of payment, legal tender, and a secure place to store money.
What are the forms of CBDC?

      The approach for issuing CBDC will be guided by two fundamental considerations:

  • Creating a digital rupee that is as close to a paper currency as possible, and providing the public with a risk-free virtual currency that will provide them with legitimate benefits without the risks associated with dealing in private virtual currencies,
  • CBDCs will have offline capabilities in order to be a more appealing and accessible medium of payment for a broad range of customers.

What is the difference between e-Rupee and crypto currency?

  • Since, it is a fiat currency, one e-Rupee can be converted into one actual Rupee. It won't experience volatility the way cryptocurrencies do.
  • Bitcoins don't have any intrinsic worth (like traditional currency or CBDC). They are vulnerable to extreme fluctuations because their value is primarily derived from a finite supply and rising demand.
  • Therefore, even though cryptocurrencies have some characteristics in common with traditional money, the aforementioned characteristics distinguish them and reduce their appeal.

What are the advantages of e-rupee?

  • The digital rupee may be used as legal money for payment purposes by companies, government organizations, and individuals, who can use it in the same manner that they use physical bank notes.
  • It will improve settlement system efficiency, stimulate cross-border payments innovation, and provide the public with applications that any private virtual currency may provide, without the accompanying hazards.
  • The e-Rupee will also make carrying actual notes unnecessary while lowering the cost of issue. It's because bank-issued real-world currency and the e-Rupee are fully convertible.
  • lowering operating costs associated with physical cash handling, increasing financial inclusion, and improving the payments system's resilience, efficiency, and innovation
  • In addition, the RBI has suggested using the e-Rupee without a bank account, allowing people to just handle the fungible digital money as they would a real note.
  • The CBDC platform would create massive amounts of data in real time. The concept note emphasizes that this data may be used effectively while keeping privacy considerations in mind.
  • It goes on to say that the data may aid in evidence-based policymaking, that it can become a rich data source for service providers seeking financial product insights, and that it can help reduce noncompliance with existing norms and regulations.

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