Many people are confused that right now the government is saying yes to digital currency but why is it saying no to cryptocurrencies like bitcoin. Only by understanding this difference, we will be able to understand the advantages and disadvantages of digital currency.


What is the difference between crypto currency and Indian government digital currency
What is the difference between crypto currency and Indian government digital currency


New Delhi: Digital currency vs cryptocurrency-

Digital Rupee or Central Bank Digital Currency (CBDC) will be RBI's next effort to boost India's digital economy. Several announcements have been made by Finance Minister Nirmala Sitharaman in the Union Budget 2022-23 regarding the digital rupee. But many people are confused that right now the government is saying yes to digital currency but why is it saying no to cryptocurrencies like bitcoin. Only by understanding this difference, we will be able to understand the advantages and disadvantages of digital currency.

According to experts, the concept of digital rupee is inspired by cryptocurrencies like bitcoin, but with central bank regulations. That is, bitcoin is unregulated while digital currency is issued by the central bank. Cryptocurrencies are managed by a computer algorithm. Whereas the digital currency is regulated by the authority. The digital rupee is recognized by the government. The digital rupee will also be included in the balance sheet of the central bank and can be converted into the sovereign currency of the country. It is proposed that digital currency in the country should be kept in the definition of banknote. For this, RBI has proposed to amend the law.


There are two types of digital currency

 - Retail digital currency is used by the general public and companies.

- Wholesale digital currency will be used for financial institutions.

Four advantages of digital currency

- Faster transactions and less expensive than printing notes

The government will be able to control the currency in the market better

Bank account is not required and offline transactions will be possible.

Every digital rupee will be monitored by the government and there will be no illegal transactions

Is Cryptocurrency Legal? Understand the meaning of government's decision on Crypto Currency

Now 30 percent tax will be levied on the income earned from digital currency in India. It can be understood in such a way that now if a person invests 100 rupees in a digital currency and he gains 10 rupees on it, then out of those 10 rupees he will have to pay 3 rupees as tax to the government.

New Delhi: When Finance Minister Nirmala Sitharaman presented the budget on Tuesday, a point caught everyone's attention. That is the new tax imposed by the government on Digital Currency or Crypto Currency. Now 30 percent tax will be levied on the income earned from digital currency in India. It can be understood in such a way that now if a person invests 100 rupees in a digital currency and he gains 10 rupees on it, then out of those 10 rupees he will have to pay 3 rupees as tax to the government.

Government will take TDS

Apart from this, one percent TDS will have to be given to the government separately on every transaction of digital currency. Suppose, a person has invested in a digital currency. This investment is his asset. Now if this person transfers this asset to someone else, then he will have to pay TDS separately at the rate of 1% on the total value of that asset. TDS means Tax deduction at source. That is, the tax, which is levied on any source. Like the tax that the government takes on the salary you get every month, it is TDS. That is, overall the government is considering digital currency as an income source and 30 percent tax has also been imposed on its earnings.

Is Crypto Currency Legitimate?

The question in the minds of many people is whether the government has made digital currency legal by taxing it? So the answer is both yes and no. Actually, the government is considering only that digital currency as legal, which will be issued by the Reserve Bank of India. This means that the current cryptocurrency, such as Bitcoin, will not be considered a digital currency. Rather it will be considered as a Digital Asset. If all this seems complicated to you, then think of it as the gold you buy or your house, they are your assets. That is, it is your property, not it is currency. Similarly, Crypto Currency will be an asset for the Government of India, and people will be taxed on it. So if you are thinking that a digital currency like Bitcoin has been considered legal, then it will not be technically correct at all. However, people will be able to invest in it.

This is the intention of the government behind the tax

Currently, in countries like America, Britain, Italy, Netherlands and Australia, digital currency is taxed in the same way by the governments there, due to which this currency is considered legal in these countries. However, there is an exception to this in some countries. A major reason behind this decision of the Government of India can be that, the number of people who have invested in Crypto Currency in our country, they are about 8 percent of the country's population. These people have put their 70 thousand crore rupees at stake in the form of such digital currency. Indians are at the forefront of using Crypto Currency all over the world. In simple words, this 30 percent tax will directly give a guarantee to the investment of 70 thousand crore rupees and it may increase its use in India. Secondly, the government knows that after this decision, people will be encouraged to invest in digital currency. So he has prepared another option.

RBI will launch its own currency

Under this, by the year 2023, the Reserve Bank of India i.e. RBI will launch its own digital currency separately, which will be more secure and stable than the rest of the currency. Simply put, just as RBI prints paper currency, digital currency with its stamp will also come, so that people will be able to invest in it. In this budget, not many people paid attention to one more thing and that is, if a person sends digital currency to another person as a gift, then in such a situation, the person who will get this currency, he will have to pay 30 percent tax. It will happen.

What is Digital Rupee? Know everything about Blockchain and Blockchain Technology

Finance Minister Nirmala Sitharaman has talked about digital currency in her budget speech. During his budget speech, the Finance Minister has made a big announcement on the digital currency of RBI.

New Delhi: Finance Minister Nirmala Sitharaman has talked about digital currency in her budget speech. During his budget speech, the Finance Minister has made a big announcement on the digital currency of RBI. The Finance Minister said that RBI's digital currency 'Digital Rupee' will be launched at the beginning of the new financial year (Financial Year 2022-2023). Digital Rupee will be launched in the market through the use of blockchain technology and other technologies. This will give a new dimension to the digital economy. Will make currency management more efficient and less costly.

The government has already made a clear stand regarding digital currency

However, there was speculation that the Modi government might make an announcement regarding the taxation on cryptocurrencies. It was also announced in the budget. During the boom of cryptocurrency, the central government had said that the country would have its own digital currency. The Reserve Bank of India has announced that it will bring its own digital currency.

What is Digital Currency?

The full name of digital currency is Central Bank Digital Currency or CBDC. It is issued by the Reserve Bank and gets the recognition of the government. It is also included in the balance sheet of the central bank. The specialty of digital currency is that it can be converted into the sovereign currency of the country. In the country it can be called Digital Rupee. It is of two types, retail and wholesale. Retail digital currency is for common people and companies, while wholesale digital currency is used by financial institutions. It will work through blockchain.

What do experts say about Blockchain?

Now you must be wondering what is this blockchain? In response to this, Kshitij Purohit explains that it is made up of two words. The chain of the first block and the second chain. Block means a lot of data blocks in Blockchain technology. Meaning that cryptocurrency ie data is kept in these blocks. Different boxes contain currency, ie data, and they are linked to each other. A long chain of data gets created. As new data arrives, it is entered in a new block. Once the block is filled with data it is appended to the previous block. Similarly all the blocks are connected to each other.

The Complete ABCD of Cryptocurrencies

Part-1: Confused with Cryptocurrency! Come, let's know a little openly about this 'secret' currency ...
Part-2: What is the stand of the Central Government regarding Cryptocurrency, will it be legal or banned in India?
Part-3: What is Blockchain and Blockchain Technology? How does it work and how secure is it?

What is data?

Each block contains the data, the hash and the hash of the previous block. Now what are these three things? Know this too. The data that resides in the Bitcoin blockchain contains the details of the transaction. Information like sender, receiver and account are recorded in it. In these data blocks, data is encoded through cryptography technology and these blocks join each other to form a long chain. Each block contains a cryptographic hash of its previous block, a timestamp and transaction data. Each block is connected to its next block.

What is hash?

You can think of hash as a biometric which is unique for everyone. That is, it is a kind of code. It is as unique as your thumb impression. If there is any change in the block, then it changes the hash code. All the blocks are virtually connected to each other. This is a kind of system in which there is no scope for tampering. If you change the data in one block, then you will have to change the data in the other block as well.


What happens after finding the hash?

When a miner secures a block by finding a strong hash, it is added to the blockchain and verified by other nodes in the network. This process is called consensus.


What happens after consensus is reached?

If the consensus is reached, the block is confirmed to be secure. If it is found to be correct, then cryptocoin is given to the miner who secures it. It is a reward which is considered to be proof of work.


What is crypto mining?

Buying through cryptography is called Cryptocurrency Mining because every information has to be created digitally in the database. Those who do this mining are called miners.


Can it be hacked or tampered with?

Blockchain can be used not only in currency like Bitcoin, but also in many other sectors. It is a secure, safe and decentralized technology that is almost impossible to hack or tamper with. But hackers can do anything.


What is Blockchain Technology?

In response, Gaurav Garg says that it is a kind of exchange process. Which runs on the data block. Each block is protected by encryption because these blocks are connected to each other through electronic means. This is a very old technology. It was first adopted in 1991 by Stuart Huber and W Scott Stornato. The main purpose of its technology was to timestamp digital documents, so that it could not be tampered with in any way.After this, in 2009, Satoshi Nakamoto revolutionized the world by inventing Bitcoin using blockchain.

What is the difference between Bitcoin and Blockchain?

There is a difference between the ground and the sky in both Blockchain Technology and Bitcoin. That is, both are completely different. Actually, Blockchain is a technology, a platform where not only digital currency but also any thing can be digitized and its record can be kept. That is, blockchain is a digital ledger. At the same time, Bitcoin is a digital medium, through which some things can be sold and bought. Although it is wrong to call it a currency, because it has no value in the real world. Kshitij adds that however, bitcoin is just one example of a cryptocurrency; Other cryptocurrency networks are also powered by blockchain technology.

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