| Image credit: haribhoomi.com |
Retail testing of India's own digital currency e-Rupee begins tomorrow. CBDC's functionality is equivalent to UPI and wallet transactions even when it comes under the label of crypto currency. I have an e-wallet, so why should I open a digital rupee wallet? The reason for this is the feeling that both are one. Although it may seem so at first glance, there are some similarities and differences between e-wallet and digital rupee wallet. Let's first look at the similarities between them.
Similarities
- Both enable digital transaction of currency.
- Reduces use of currencies.
- Increases transaction speed.
- Eliminates the hassle of managing currencies.
- Making transactions faster and more efficient.
- Both are in wallet form.
The main differences
we add money to both wallets. But e-wallets continue to operate on bank accounts. But once the money is added to the digital rupee wallet, the bank has no role. The transactions will be regulated by the RBI.
Digital Rupee represents blockchain technology. Blockchain's technology encompasses the ecosystem, including mobiles. Hence transactions are possible even without internet. The latest report is that the digital rupee will also enable offline transactions. Offline transactions are possible due to the availability of digital rupee wallets on mobile devices. The wallet will be updated later when the device is online.
More efficiency, speed, cost reduction
Digital wallets manage things faster than e-wallets. The reason for this is that there are no financial institutions other than RBI among them.
Digital wallets do not have time-consuming transactions like NEFT. Everything is instant. Errors occur in e-wallet transactions, though rarely. The UPI error rate is 1.2-1.3 percent. But this rate will come down again in digital wallets. It goes without saying that
digital rupee wallet costs less than other wallets and UPI transactions. You can achieve good results in international transactions etc.
Current e-wallets are supported by banks and other private institutions, many of which are not supported by the RBI. But the digital rupee wallet will be directly supervised by the RBI.
currently Digital Rupee Wallet does not offer any interest on deposits. Therefore, big announcements can be expected in the upcoming budget. There is even a possibility of tax exemptions for those who receive their salaries in digital rupees. However, some charges should be expected when converting digital rupees into cash.
Most of the countries have already welcomed India's digital rupee. Hence, transfers to and from foreign currencies will be easy. Also transaction costs will be reduced. Currently transferring money from other e-wallets to foreign currencies is a difficult and expensive process. A digital rupee wallet may in future enable direct transactions with countries that have official digital currencies. The e-rupee is a fledgling child for India. Therefore, we can expect the government's support until it grows.
