E-rupee Vs Cryptocurrency: similarities and differences

There have been significant developments in digital currency in recent years. The public has been puzzled as a result of this. And you can’t blame them. Almost now and then a new cryptocurrency or a new payment application emerges and makes it to the news. Recently RBI has started to roll out E-rupee and on a surface level, it makes an appearance of a cryptocurrency. But is it the case? Let’s find out in this article.

E-rupee and Crypto—similar?

Cryptocurrency is one type of digital currency. It can be utilized as an alternative form of payment. The word “crypto,” which precedes the word “cryptocurrency,” refers to the cryptographic techniques used to process and record payments. Therefore, there is no need for a bank or other organization to regulate anything or maintain records. This method also goes by the name of the blockchain technology. To know more about this technology, we would suggest to through this book titled as “Blockchain Revolution“. This book is actually referred by Satya Nadella, CEO of Microsoft and Steve Wozniak, co-founder of apple.
Utilizing this kind of money is completely decentralized. Some of the most well-known cryptocurrencies, like Bitcoin, Ethereum, Dogecoin, and others, are certainly names you’ve heard of. The names mentioned above refer to many sorts of cryptocurrencies, each with a distinct value, much as each nation has its currency with varied values.

Let’s move on to E-rupee now. Although it is centralized, the digital rupee, commonly known as the E-rupee, is likewise a digital currency. which is that the Indian government controls it. As a result, it falls under the category of CBDC, or central bank digital currency. One important distinction to make is that the E-rupee is the digital equivalent of paper money. As a result, it is processed using almost the same laws that apply to physical currency.

It’s important to note that both of these currencies use blockchain technology, although one is decentralized and the other is centralized.

Key differences in E-rupee and Crypto

1. The e-rupee is a digital currency, therefore it may be used to make payments. In contrast to traditional currencies, which can only be used as a means of commerce, cryptocurrencies may be used as both a medium of exchange and a form of investment. Similar to share and fund prices, the price of a cryptocurrency changes in real-time in reaction to market circumstances. The electronic rupee is an exception to this. For the actual, physical currency, it serves as legal tender.
2. The e-rupee is directly affected by inflation. This is because inflation directly impacts a country’s currency’s value, and as the E-rupee is a legal tender, inflation will likewise have an impact on it. The impact of cryptocurrencies, on the other hand, is comparable to that of a stock because it is a type of asset. A cryptocurrency’s value changes depending on how much demand there is for it.
3. Cryptocurrency transactions are safer because they are encrypted, even though they are recorded on a decentralized ledger that is open to the public. Only the sender and the recipient may see transactions made with the Digital Rupee, however, the security of these transactions completely depends on the strength of the password you choose for your digital wallet.
4. Cryptocurrency is not something that can be issued, rather using blockchain technology and lots of computing power they are mined. On the other hand, E-rupee is issued and maintained by a central bank which is RBI.

Which currency should I buy?

Since both of these currencies serve different purposes, it is more like deciding between buying a fruit or a vegetable rather than determining which is the best fruit. Both play different roles.
Most of the world’s countries do not now accept cryptocurrencies as a form of payment. There are two main reasons, first, it is decentralized, and second, due to changes in its valuation in real-time, it makes it difficult to carry out transactions. If you are looking for an additional medium or platform to invest money then definitely cryptocurrency is something to consider.

On the other hand, if you are in a market looking for going cashless, E-rupee is one of the latest and a new medium allowing people to be cashless. It is highly stable and completely centralized.

Conclusion

The start of a digital economy is marked by the launch of cryptocurrencies and the Digital Rupee. It demonstrates that there will likely be many more channels available in the future for people to make payments and make investments. It’s worth investing time in learning new technology and skills responsible for the digital economy.