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Digital Currency Vs Cryptocurrency: What is digital currency, how different is it from cryptocurrency?

Digital Currency Vs Cryptocurrency: What is digital currency, how different is it from cryptocurrency?


Reserve Bank of India made a big announcement on Thursday. RBI Deputy Governor T Ravi Shankar told about this. He said that the central bank will soon introduce digital currency. He has started preparing for it.

 
 Actually, RBI had indicated long back to launch its digital currency. Central banks of many other countries of the world are also preparing to start digital currency. Do you know the meaning of digital currency? Let us know what it means and how it is different from cryptocurrency . 

 What is digital currency? The full name of digital currency is Central Bank Digital Currency. It is recognized by the government of the country whose central bank issues it. It is also included in the balance sheet of the central bank of that country.

Its specialty is that it can be converted into the sovereign currency of the country. In case of India you can call it digital rupee. There are two types of digital currency – Retail and Wholesale. Retail digital currency is used by common people and companies. Wholesale digital currency is used by financial institutions. 

There is a lot of difference between Digital Currency and Cryptocurrency .
The biggest difference is that digital currency is recognized by the government of the country whose central bank issues it. Therefore there is no risk in it. This can be used for purchases in the country of issue. It can be converted into sovereign currency i.e. the currency of that country. This facility is not available with cryptocurrency. 

 RBI in preparation to bring its digital currency, Deputy Governor told the plan Second, the difference is that the value of a digital currency does not fluctuate like a cryptocurrency. The price of cryptocurrencies fluctuates a lot. Bitcoin is an example of this.


 In the last three months, the price of bitcoin has fallen to less than half. Third, there is mining of cryptocurrencies. For this, blockchain technology is used. In contrast, the central bank issues digital currency.

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