What is Digital Rupee ?
Digital Rupee is a digital currency developed by the RBI (Government of India) in order to improve and modernize how currency is transacted. The digital rupee network is an open source platform that allows users to send and receive digital money quickly, securely and cheaply. Digital rupees use blockchain technology as its underlying technology, enabling transactions to be validated by a distributed network of computers instead of relying on trusted third parties like banks. This means that it is a much faster, cheaper, and secure way for people to transact with each other without worrying about trusting middlemen.
Pros of Digital Rupee
1. Greater Accessibility:
With digital rupee, transactions can be carried out from any part of the country with the help of internet. This eliminates the need to go to a physical location for making payments or transferring money which generally take lengthy and expensive procedures. The seamless and secure access to digital currency increases its usability.
2. Lower Fees:
The advantage of digital rupee is that it eliminates the need for costly wire transfer fees typically associated with remittances. Moreover, digital rupee also reduces transaction costs, which means customers can keep more of their money in their pockets instead of paying huge transaction charges to financial institutions like banks and other payment gateways.
3. Faster Transactions:
Currently, transactional processes such as fund transfers take anywhere from one day to several days depending on where you are sending your funds from and to (international transfers typically require multiple middlemen). But with digital rupee this entire process can be completed in a matter of minutes without having to worry about foreign currency conversions or time-consuming paperwork process.
4. Global Reach:
The global availability of digital rupee allows customers to make payments or transfers online from anywhere in the world with minimal fees as long as they have access to an internet connection. This greatly simplifies cross-border money transfers that used to require elaborate paperwork and high charges from banks before now.
5. Increased Security:
Digital currencies such as Bitcoin offer built-in security measures that protect users’ personal information and account balances from being compromised by cyber criminals. Additionally, users have full control over their funds at all times, unlike traditional methods which may give authority to a third party middleman or governing body if needed - this increases transparency between parties involved in a given transaction leading to greater trust overall
Drawback of Digital Rupee
The main drawback of digital rupee is that it can be more easily subject to cybercrime and online theft, which could lead to major financial losses. Additionally, it is vulnerable to manipulation and fraud, both on the part of malicious actors as well as by governments and other central authorities. Finally, digital rupee transactions remain largely unregulated and there are still many gaps in our knowledge about how digital currencies work and what kind of legal protection they offer users.
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