Essay On Digital Currency In India | Advantages & Disadvantages
Essay On Digital Currency In India
Digital Currency available in digital or electronic form and not in physical form. It is also known as electronic money, cyber-cash, electronic currency, or digital money.
They are accessible with computers or cell phones. Digital currencies do not require an intermediary for a transaction. All digital currencies are not cryptocurrencies but all cryptocurrency is 100% digital currency.
What Are digital currencies?
Digital currencies are intangible. Transactions can be done only through computers, cell phones, or electronic wallets. Like any other fiat currency, it can also be used to purchase goods and pay for services.
Digital currency mainly worked for instantaneous transactions, When it linked to supported devices and networks, it can be seamlessly executed to make payments across borders.
As payments in digital currencies are made directly between the parties without the need for intermediaries the transactions are usually instantaneous and low cost. Transactions involving brings in necessary record-keeping and transparency in dealings.
David Chaum introduced the idea of digital cash through a research paper in 1983. In 1989, he founded Digicash an electronic cash company to commercialize the ideas in his research.
E-gold was introduced in 1996. In 1998 Paypal came into the picture. In 2009, bitcoin was launched which is a decentralized blockchain-based digital currency with no central server and no tangible assets held in reserve.
Advantages Of Digital Currency
- Lower transaction costs and ability to make payments any time.
- Receiving funds more efficiently than by legacy financial institutions.
- It is easier for international customers to do business with you.
- Fraud protection, for e.g. In Cryptocurrency Trading, you don’t require to show your personal information.
- The cost of making currency becomes decreased due to digital currency
- Anyone can easily receive or send payment anywhere, anytime.
Disadvantages Of Digital Currency
- For Digital Currency strong technical mechanism required.
- lack of proper Internet connection across the country
- Lack of skilled users
- Lack of electronics, gadgets, such as mobile, laptop, etc. between poor’s person.
- Reduces the number of jobs in the banking sector.
Digital Currency in India
If a digital currency is regulated by a central bank. it is known as central bank digital currency(CBDC).
Unlike crypto-currencies which are issued without a central bank backing and are issued and traded on exchanges, a CBDC is a digital currency that holds the same value as fiat currencies issued by a country’s central bank.
At the end of the day, digital currencies have the potential to change the world of business as we know it. In other words, the obstacles that digital currencies must overcome in order to become ‘mainstream’ are not just economic but mental, as well.
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