Many are wondering what’s the role of the Digital Rupee (e₹-R). They want an explanation of what it is, if not a cryptocurrency. And if it’s all about transferring Rupee online, then what was the need to launch it if we already had UPI? Worry not, this article will speak to all you need to know.
Digital Rupee (e₹-R) Launched By RBI
Digital Rupee, RBI’s first digital token, was launched in India, on December 1st. It’s available to buy and trade via select banks as a mediator for the transaction. Currently, the pilot launch of this digital currency allows only the wholesale segment to purchase it.
Where To Buy?
Presently, RBI has licensed four major banks- State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank, to issue digital rupees in India. Later, the Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank, these four are going to get access from RBI to distribute the digital currency across the Nation. Currently, there is no dedicated app or website to buy Digital Rupee, but as the banks are getting licensed it will all be managed in time.
You Should Know Digital Rupee Is Not Crypto
Digital Rupee or Central Bank Digital Currency (CBDC is very distinct from traditional cryptocurrency. CBDC has RBI’s back whereas a normal cryptocurrency is decentralized, meaning managed by multiple groups. So, Digital Rupee, unlike Crypto, is issued and controlled by the Central Bank of India, RBI. Also, the value of a cryptocurrency fluctuates with the decisions of traders, whereas the value of the Digital Rupee will be unchanged, with it being considered a legal tender. So, this currency will be utilized to make person-to-person (p-to-p) and person-to-merchant (p-to-m) transactions.
Here’s How Digital Rupee Differs From UPI:
Through Definition
UPI or Unified Payment Interface is used to transfer your money kept in digital form to your bank accounts. On the other hand, eINR or E-Rupee, or CBDC is another form of our currency that is similar to fiat currency, the Indian Rupee, of which the value will be fixed to perform P-To-P or P-To-M transactions.
Their Types
UPI has no types, it’s just an online payment platform to transfer money online. Whereas, Digital Rupee has two types- Retail, which will help the private sector, businesses, and retail consumers to transact and another is Wholesale, this type will be only used by Financial Institutions for bulk deals.
As Per Availability
UPI is available across the Nation and is accepted in Nepal, Bhutan, UAE, France, UK Malaysia, Russia, and Singapore. As for E-Rupee, it will first be available in select cities like Mumbai, New Delhi, Bengaluru, and Bhubaneswar. Later, it will be available in Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.
Also read:
You Can Get A Loan Without ITR, Here’s How
Interest Earned
Normally, when money is stored in bank accounts it earns interest for you and is credited to your account. But E-INR is going to be introduced only to make payments and will not incur any interest amount.
