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All you need to know about digital currency and cryptocurrency

June 30, 2023

All you need to know about digital currency and cryptocurrency

These days, digital currency and cryptocurrency are turning heads.

Everyone is curious to know the usage of both the forms and the security & protection.

Let us introduce you to the,

Key highlights and differences of both forms of currency.

Take a look at the update as passed in the union budget presented in 2022 by the Finance Minister, Nirmala Sitharaman, on virtual digital assets and the plans.

Finance Minister proposed a 30% tax on the transfer of virtual digital assets, bringing revenue from cryptocurrencies like Bitcoin and Ethereum into the tax net.

She also recommended a 1% TDS on payments beyond a certain amount.

She also announced the launch of the Central Bank Digital Currency (CBDC), also known as the Digital Rupee, to be issued by the RBI based on blockchain and technology.

This ensures to make the currency management system more efficient and affordable.

Now let us understand the difference between digital currency and Cryptocurrency.

Digital currency is,
a contactless version of fiat currency that may be utilized electronically. It is governed by the RBI. Whereas,

Cryptocurrency is,
value storage system built on blockchain and protected by encryption. Additionally, it is an unregulated and decentralized system.

Considering the stability & usage,

Bitcoin and other cryptocurrencies are highly volatile, and digital coins are not widely accepted yet.

On the other hand, rates of digital currencies are stable and globally accepted.

The most interesting fact you must know about both transactions is;

Transactions in digital currencies are only known to the banker, sender, and receiver.

However, cryptocurrency transactions are publicly available on a decentralized ledger.

Regarding the security of both forms,

Digital currencies need strong passwords to protect digital wallets, credits, debit cards, and banking apps,

whereas cryptocurrencies are secured by encryption.

Acquire detailed knowledge about banking by opting for a banking course from a top institute and learn all the banking terms, products, trends, and updates.

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