How Is RBI’s Digital Rupee Different From Cryptocurrency?
In recent months, the Reserve Bank of India (RBI) has discussed introducing its own digital version of the Indian rupee. This has sparked a lot of discussion about how it would be different from existing cryptocurrencies such as Bitcoin and Ethereum. In this blog post, we’ll explore the differences between the RBI’s digital rupee and cryptocurrencies, to help you better understand the implications of this new currency.
RBI’s digital rupee is not anonymous
The Reserve Bank of India’s (RBI) digital rupee is not anonymous and all transactions using this currency are traceable. This is because the RBI will keep a record of all transactions using its digital rupee. All user information, including the identity of the sender and receiver, will be recorded in a distributed ledger. This data will be accessible to regulators and law enforcement agencies, which will help them track down any illegal or fraudulent activities. Additionally, RBI has also mandated that banks must follow KYC (Know Your Customer) and AML (Anti Money Laundering) protocols for its digital rupee, making it even more secure and traceable.
Transactions using RBI’s digital rupee are traceable
The Reserve Bank of India (RBI) is the central banking institution of India, and it is currently in the process of developing its own digital currency, known as the Digital Rupee. This digital currency will be distinct from cryptocurrencies like Bitcoin, as it will be issued and regulated by the RBI.
One key distinction between the digital rupee and cryptocurrencies is that transactions using the digital rupee are traceable. This means that when a user sends money to another user, both users can trace the transaction and verify that it took place. This is due to the fact that the digital rupee will be stored on a distributed ledger system that is managed by the RBI. The RBI will also be able to monitor all transactions made using the digital rupee, which means that it can detect any suspicious or illegal activities.
In contrast, transactions made using cryptocurrencies like Bitcoin are not traceable. This means that users do not need to reveal their identity in order to make a transaction, making them attractive to those who wish to remain anonymous. However, this lack of transparency also means that it is difficult to detect any suspicious activities and makes cryptocurrencies more susceptible to fraud and money laundering.
The traceability of transactions made using the digital rupee gives users greater protection and provides additional safety for those who wish to use it for their everyday financial needs. The RBI is also working towards ensuring that the digital rupee meets international standards of compliance with anti-money laundering regulations.
Not issued by any central authority
Cryptocurrencies are digital assets that are created and exchanged without the involvement of a centralized authority. Instead, they are created and exchanged using blockchain technology, a distributed ledger system that records transactions on a network of computers. Unlike traditional currencies, cryptocurrencies are not issued by any government, bank, or other central authority. They are managed by a decentralized network of computers that validate and secure the transactions and act as a distributed public ledger. As there is no centralized authority to control the currency, it allows users to remain anonymous while conducting transactions.
Cryptocurrencies are decentralized
Unlike traditional currencies which are centrally managed and issued by a central bank or other financial institution, cryptocurrencies are not subject to government control or regulation. This means that transactions using cryptocurrency are extremely secure, as there is no central point of failure. This also allows people to remain anonymous when making cryptocurrency transactions, as all transactions are recorded on an open, public ledger.
The decentralization of cryptocurrencies makes them an attractive choice for those looking to make financial transactions that cannot be traced back to them, as well as those looking to protect their assets from government control.
Conclusion
RBI’s digital rupee and cryptocurrencies are two entirely different forms of digital currency. RBI’s digital rupee is issued by the Reserve Bank of India, making it a centralized form of digital currency, while cryptocurrencies are decentralized, meaning they are not issued by any central authority. Additionally, RBI’s digital rupee is traceable and can be backed by reserves, while cryptocurrencies are not backed by any assets and are anonymous. Ultimately, understanding the differences between these two forms of digital currency is important in order to make informed decisions when it comes to money and investing.
Go to Quantum Code, the official trading website, if you trade cryptocurrency.
Looking for a job? Download the Kenyan Jobs app from Google Playstore and get the latest jobs and vacancies available in Kenya, go HERE>>>
Download our blog’s APP from Google Playstore using the link here>>>
