Digital Currency Vs Cryptocurrency: Let’s take a look at the differences between the two.
#NewDelhi : Indian Finance Minister Nirmala Sitharaman has announced in the 2022 budget session that Digital Currency will be launched in India. This digital currency will be under the Reserve Bank of India (RBI). This digital currency will be introduced in India instead of cryptocurrency. Let’s take a look at the differences between the two (Digital Currency Vs Cryptocurrency).
Digital Currency –
This is a digital format of currency. It can be carried through a digital wallet and can also be withdrawn from an ATM. Its authority is the Reserve Bank of India. It can also be exchanged with Indian currency.
On the other hand, cryptocurrency transactions can only be done online. It cannot be used through any digital wallet nor can it be withdrawn from an ATM. It has no legal branch. It is used as a purely virtual.
Let’s take a look at the 5 major differences between digital currency and cryptocurrency –
1) Centralization (Centralization) –
The biggest difference between them is the Reserve Bank of India controlling the digital currency. But no one controls cryptocurrency that way. As a result, it is possible to track digital currencies, but not cryptocurrencies.
2) Encryption –
While digital currencies do not require encryption that way, encryption is very important in cryptocurrencies. Because it involves different types of blockchain. This requires encryption.
3) Transparency –
In the case of digital currency, only transparency is maintained between the bank and the customer. Because in this case the transaction is taking place between the bank and that customer. On the other hand, transparency is a very important issue in cryptocurrency. The main reason for this is that the whole thing is being done online. As a result, transparency needs to be maintained with them.
4) Stability –
Digital currency is more stable than cryptocurrency. Because the digital currency is under control. Cryptocurrency, on the other hand, has very little stability because it has no control.
5) Legality –
Many countries like India are now trying to legalize cryptocurrency. It has already been legalized in many countries around the world. Digital currency, on the other hand, is perfectly legal. Because the Reserve Bank of India controls it.