Cryptos | Price | Market Cap | 24h | 7D | 1M | 1Y |   | Vol. 24h | |
|---|---|---|---|---|---|---|---|---|---|
Cryptos | Price /24h% | | |||||||
|---|---|---|---|---|---|---|---|---|---|
Showing 1 - NaN from undefined
Digital currencies can be classified into different forms depending on who maintains their value, who issues them or how they can be used.
Cryptocurrency: A digital currency that runs on a decentralised network rather than being issued by a central authority. Transactions are secured using cryptography and recorded on a public blockchain. Its value is driven by market demand and can rise or fall significantly. Bitcoin and Ether are common examples.
Stablecoin: A digital asset created to keep its value relatively stable. It is usually linked to a fiat currency such as the US dollar, a commodity or another reference asset. Depending on the stablecoin, the value may be supported by reserves or maintained through an algorithm. USDT and USDC are two widely used examples.
Central Bank Digital Currency (CBDC): A digital version of a country's official currency, issued and controlled by its central bank. Unlike cryptocurrencies, a CBDC is part of the country's monetary system and is intended to maintain the same value as the national currency. In India, this is the Digital Rupee (e₹ or e-Rupee), issued by the Reserve Bank of India.
Retail vs Wholesale CBDC: A CBDC can be designed for different types of users. Retail CBDC (e₹-R) is meant for everyday payments made by individuals and businesses, including person to person and person to merchant transactions. Wholesale CBDC (e₹-W) is used by financial institutions, mainly for interbank settlement and large value transactions such as government securities.
Digital currency is an umbrella term for any type of money or value that is in existence and transferred electronically. It covers cryptocurrencies, including Bitcoin, stablecoins, central bank digital currencies (CBDCs), and other digital currencies. Cryptocurrency is a sort of digital currency which generally relies on cryptography and blockchain technology to verify transactions. Many cryptocurrencies are decentralised and not backed by a central bank or government. To sum up this statement simply: All Cryptocurrencies are digital currencies, but not all digital currencies are Cryptocurrencies.
The digital rupee, or e-rupee/e₹, is the central bank digital currency (CBDC) of India. It is issued by the Reserve Bank of India (RBI), and it is the digital version of the Indian Rupee. The digital rupee is also issued by the RBI and is worth the same as the physical currency. It's centered around the ability to make digital payments and transfers, and on the provision of a new type of sovereign, central bank-issued money.
No, the digital rupee is not a cryptocurrency. They both exist in digital form but are still different. The Reserve Bank of India issues and regulates the digital rupee, and it is legal tender in India. Cryptocurrencies like Bitcoin are typically decentralised digital currencies that are not issued by a central authority. The e-rupee would thus be a central bank digital currency (CBDC) and not a cryptocurrency.
A CBDC is digital currency issued by a country's central bank, and a stablecoin is a privately-made digital currency with a stable value, typically pegged to an asset like the US dollar. India's digital rupee is an example of a CBDC issued by the RBI that is sovereign money. The stablecoin is generally backed by a private entity or organization and is based on blockchain technology. Both can aim to provide price stability, but the issuer, their legal standing, and their structure can differ significantly.
Digital Rupee and UPI are two different concepts. The digital rupee is money, and UPI is a payment system that lets users move money from bank accounts to bank accounts. Usually, when you pay money via UPI, it's from one bank account to another. Digital rupee payments are made through the digital wallet of the central bank. They can both be used for quick and easy payments, though they're based on different systems.
The RBI has been working on offline aspects of the digital currency, which could enable certain payments to be made offline even if users do not have access to the internet or if it is restricted. The offline functionality of the e-rupee could make the digital currency more accessible to those in areas with weak internet connectivity and enhance the fault tolerance of India's digital payments ecosystem. The offline digital rupee payment availability and its capabilities, however, could be influenced by the type of wallet, technology, and RBI-sponsored implementation.
Certain digital currencies and cryptocurrency assets can be accessed by Indian investors on platforms serving Indian investors, as per applicable regulations and platform requirements. Users should be aware of the potential risks of investing in cryptocurrencies, such as volatility, security concerns, and regulatory uncertainty, before making any investment. The digital rupee should be noted as a non-investment asset, as it is not Bitcoin or a cryptocurrency. It is a digital currency that is meant for payments and transactions, not investment returns.
In India, the digital currency is not treated as a uniform asset, but rather as one of a variety, depending on the specific type of asset involved. The Indian tax regime has distinct tax provisions for cryptocurrencies and other qualifying virtual digital assets (VDAs) that might differ from the tax regime applicable to traditional investments. The digital rupee, however, is equal to the Indian rupee and is not a speculative investment in itself due to its digital nature. Because of the nature of tax laws and the varied situations of the individual, investors should check current tax laws or call their tax advisor before making the filing of individual returns.
The legality of digital currency in India is subject to the type of digital currency being discussed. A digital rupee will be legal tender and will be issued by the Reserve Bank of India. Cryptocurrencies and other virtual digital assets are not currency in the traditional sense, but they can be purchased, sold, and stored in India, and are subject to a still-evolving regulatory and tax landscape. Prior to making any investment or deal in cryptocurrencies, users need to know the related laws, tax liabilities, and dangers. The legal framework is subject to change, so it's crucial to keep up with the latest developments.
