How to Buy and Use Digital Rupee in India

Digital Rupee or e-Rupee is a central bank digital currency (CBDC)—a digital form of cash or paper money—which can be exchanged for any other government-issued currency. This means the value of the Digital Rupee and paper money are the same. It would be distributed through intermediaries, that is, banks.

The Reserve Bank of India (RBI) stated that citizens could use Digital Rupee to buy and shop by conducting online-like transactions using quick response (QR) codes displayed at merchant locations. 

The transaction in Digital Rupee can be between person-to-person (P2P) and person-to-merchant (P2M). It will be possible for users to exchange Digital Rupees through a digital wallet provided by the participating banks and kept on mobile phones or other electronic devices. It will be possible for users to transfer Digital Rupee to friends and family members. 

Digital Rupee versus UPI

Digital Rupee and Unified Payments Interface (UPI) are two different concepts. UPI is an interface that allows users to make online transactions based on physical currency, while the Digital Rupee is another form of currency similar to fiat currency that an individual can’t take out of their bank account. 

Digital Rupee versus Cryptocurrency

Digital Rupee and cryptocurrency may have similar features but in reality, are different concepts. Cryptocurrency is based on blockchain technology, unlike Digital Rupee. Also, cryptocurrency is volatile, and the value fluctuates as per the market. The value of the Digital Rupee doesn’t change.


A few features of the Digital Rupee or e-Rupee include easy conversion into cash and commercial bank money. Being a flexible legal tender, a user can use it without a bank account. It is irreplaceable and will be governed by the central bank, which will monitor the risk of volatility.

You May Also Like

Taxation of dividend income received on or after 1 April 2020 (FY 2020-21)

You may receive a dividend from your equity or mutual fund investments.…

Know the taxation rules for income F&O trading

Futures and options are stock derivatives that are traded in the stock…

Important Cash Transaction Limits and Penalties Under Income Tax That You Need to Know About

In India, there are a lot of transactions that go unaccounted for,…

Role of Technology in the Era of COVID-19 Pandemic

Technology will not be able to avoid the onset of a pandemic;…