How is the digital rupee different from UPI?
Ever since digital payment started in India, since then people mostly make payments through UPI, PhonePe, Paytm, or GooglePay only. But now India itself has brought its own digital currency, which will make online transactions even easier. Let us know, how the Digital Rupee is different from UPI, and how will it work.
How UPI works in India?
You see, any UPI transaction involves the intermediation of the bank. So, when you use a UPI app, the message goes to your bank. your bank account gets debited, and money gets transferred to the CPNs, and to the receiver’s bank. His account gets credited and he gets a message on his mobile phone. So, there is an intermediation of the bank in that process.
How Digital Rupee Works?
In CBDC, just as paper currency, you go to a bank. Let’s say you are drawing some thousand rupees currency notes. You draw Rs1000 and keep it in your purse. You go to a shop, you have to pay RS500. You take out RS500 and pay here.
Also, you will draw the digital currency and keep it in your wallet which will be basically your mobile phone. And when you go and make a payment in a shop or to another individual it will move from your wallet to his wallet. There is no rooting or there is no intermediation of the bank.