Digital money can also help stem financial fraud.
The Reserve Bank of India has launched the pilot project of its ambitious digital rupee. The project has been launched in select cities and only eight banks -- ICICI, SBI, ICIC, Yes Bank, IDFC, Bob, Kotak, Union Bank of India, HDFC -- have been made part of this.
The digital rupee can't be bought. It is a currency unto itself. For instance, do you ever buy currency notes? No. You get the notes in exchange for goods and services. You give this money in return for goods and services.
RBI's digital rupee is aimed at replacing paper and metal money completely. This will be electronic money that can be transferred and received via mobile and computer-based allegations. A person would not even need the internet to do these kinds of transactions. The RBI hasn't released the modalities of the digital currency yet.
Digital money can be used for person-to-person and person-to-merchant transactions.
What's the purpose of the money? RBI spends a lot of money on minting coins and publishing currency notes. These notes and coins need a lot of money for distribution as well. Moreover, these coins and notes can get damaged and have to be replaced on a regular basis.
With the use of digital currency, most of these problems will automatically get resolved.
Digital money can also help stem financial fraud.
Also read: RBI Recruitment 2022: Apply for various posts before June 13, check selection process, steps to apply online
How will it work?
Digital wallets and mobile phones and other devices can be used to use digital money. Digital money will be released in the same denomination as regular money.
To use digital money, one requires a UPI id and QR code. You will have to be part of the digital ecosystem.
There won't be any interest on cash placed in these wallets. This is similar to normal money but in digital form. If you don't get any interest in storing money in your pocket, you won't have any interest in digital money.
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