All You need to Know about Digital Currency

Sakshi Education

Reserve Bank Of India announced its Pilot Launch of Digital Rupee in Wholesale segment (e₹-W) from today i.e. 1st November. The use case for this pilot is settlement of secondary market transactions in government securities.
Use of e₹-W is expected to make the inter-bank market more efficient. RBI is planning to launch the first pilot in Digital Rupee - Retail segment (e₹-R) within a month in select locations in closed user groups comprising customers and merchants. The launch of the Digital Rupee is in line with the Finance Minister’s announcement of Central Bank Digital Currency (CBDC) in her Budget speech on 1st Feb 2022.
The Finance Ministry expects that the CBDC will give a big boost to digital economy and will lead to a more efficient and cheaper currency management system.
With the developments in the economy and the evolution of the payments system, the form and functions of money has changed over time, and it will continue to influence the future course of currency. The concept of money has experienced evolution from Commodity to Metallic Currency to Paper Currency to Digital Currency.
The changing features of money are defining new financial landscape of the economy. Further, with the advent of cutting-edge technologies, digitalization of money is the next milestone in the monetary history. Advancement in technology has made it possible for the development of new form of money viz. Central Bank Digital Currencies (CBDCs).