Digital Rupee vs Cryptocurrency: 5 key differences

Jan 19, 2024 By: Nisha Kumari Image credit: Boston University

Digital rupee (e₹) is an exchangeable currency issued & managed by a Central Bank. Whereas, Cryptos are decentralized currency operating independently.

[{"selector":"#anim-fba4d30c-9064-4472-a659-a1e925bf3ba4","keyframes":{"transform":["translate3d(121.52779%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1fee1f66-af74-4e10-922a-c6fc5b262aab","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b0ab8e56-e800-4a35-afb4-25d05ef5c7a6","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-f13dbc9d-473f-45b5-8a1e-5b4904920046","keyframes":{"transform":["translate3d(100.00000%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-0dbbb659-d1c8-428e-a527-fa665ebc91f8","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-010e190e-5e81-4ddc-af0c-8e74f24d2b22","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] Image credit: Vkeel.com

Cryptos such as Bitcoin, ETH, etc., will not enjoy tax exemptions, except for RBI's digital rupee, which is exempt from tax regulations.

[{"selector":"#anim-373ae47b-d37f-41ca-9c73-29099b4e34b4","keyframes":{"transform":["translate3d(124.01433%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-07a9d858-ddb6-4b87-8bfb-da6a8957422e","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-5faf4b51-0307-45d5-a10c-a210178bb266","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-c38ded9e-95af-4403-bdab-4e3adcdcf748","keyframes":{"transform":["translate3d(98.59155%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a928dd0f-efee-444f-b29a-9ff85a2eabf8","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-e2a9a299-ffe6-4935-ae7e-62c15b7ccc0f","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] Image credit: Equitypandit

– Mitigates credit & liquidity risks – Reduces cross-border payment expenses – Sustains the global prominence of the $ – Promotes financial inclusion – Broadens access to the public

[{"selector":"#anim-7f173965-4313-417d-8879-2cae30dc66a2","keyframes":{"transform":["translate3d(120.13201%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ecbd9a8f-8f4e-4c71-bb9e-737f8128afa0","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-3182659a-f276-4899-b04d-5543f6569d3b","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-abfb5ecc-65b3-47a8-a7b6-caaa484089df","keyframes":{"transform":["translate3d(100.00000%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-71379392-0b85-49c5-8c6c-a6a5fea207fd","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-871a2734-f27f-4b73-8cbb-2d299c700759","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] Image credit: Biznext India

– Eliminates single points of failure – Fund transfers between parties – Can be utilized for generating returns – Streamlines remittances

[{"selector":"#anim-4c30231d-c8a9-4ec9-82cf-ff803347014e","keyframes":{"transform":["translate3d(116.88312%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-f4b5a136-913c-487a-9709-cfefda02125e","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-eb994a42-8ac4-4c3b-b509-7f867c69026e","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-db0539d4-91bd-4636-b8d8-9eb5a422c7e6","keyframes":{"transform":["translate3d(100.00000%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b16393a6-9288-451e-980d-4937d4a54fdc","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ea4f041e-8dd7-4c30-9688-38e8c5216309","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] Image credit: Entrepreneur

July 2023 court rulings in the U.S. classified cryptos as securities for institutional buyers but not for retail investors on exchanges.

[{"selector":"#anim-5683b9f5-27d9-4d93-86c2-9f62a27d278f","keyframes":{"transform":["translate3d(100.00000%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-5ae0bc88-604f-4bf3-b6f2-8afb62e79b20","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a306ec88-0adc-4ab8-8a95-d3b13aef73b3","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-18c25fd8-9eb9-4fe3-8f97-2e2ef63d9d2f","keyframes":{"transform":["translate3d(116.88312%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d8052514-9f4a-41e1-baff-8e9c6e2e4e15","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1c5365f3-3773-4896-820b-412e70fa95f2","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] Image credit: Fidelity Investments

Legal in the EU, cryptos qualify as "financial instruments" backed by the European Commission's Markets in Crypto-Assets (MiCA) regulation in June 2023.

[{"selector":"#anim-4cc1645d-0e0e-417e-919e-8f3bb6927f2b","keyframes":{"transform":["translate3d(100.00000%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-404a98a2-3d78-484d-a2a6-b430f280551f","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-63a40997-e677-4686-86f4-ca635620a0f8","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-d2e47f3e-a9b0-42b7-ad4e-a611f6cffbde","keyframes":{"transform":["translate3d(116.88312%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-e42542c6-109d-4ea3-9095-6a4424217246","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-196bc205-db91-4004-bfdd-f11b1dbbcd36","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] Image credit: Fidelity CNET

Bitcoin is legally recognized as property under Japan's Payment Services Act. China has banned cryptos but has Digital rupee.

[{"selector":"#anim-8ce7400d-7d88-4fd1-bf56-d8d046f9781f","keyframes":{"transform":["translate3d(100.00000%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-5595e3dd-c9c3-4e4f-b402-eb10db7f73d1","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1ef29e42-319e-4f5b-a2bd-104505f68fdf","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-03c6d6fa-e668-4680-905c-69e60bd1c2c9","keyframes":{"transform":["translate3d(116.88312%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b6a7bf81-48d5-4cba-b561-ff091aef39c4","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-c63e7004-c8a6-429e-99b1-80a6cacfc20c","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] Image credit: The Motley Fool

Bahamas, Nigeria, Dominica, Montserrat, Antigua & Barbuda, Saint Lucia, St. Kitts & Nevis, St. Vincent & the Grenadines.

[{"selector":"#anim-983192af-21cb-4771-8b91-1a7769b680f0","keyframes":{"transform":["translate3d(100.00000%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ecdada46-493f-4379-8d3e-97e7a89e0c41","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-98c5330f-e33a-49e2-bd0c-4b33ef2c2d8c","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-974b8633-dbbf-4f2a-b56f-fb4d30b31ead","keyframes":{"transform":["translate3d(116.88312%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a0bc1764-e0f2-4012-b9d7-f5550df8a433","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a1e7095c-09b2-488c-a154-20e94fe5a287","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] Image credit: Cashfree payments Learn more

Digital Rupee vs Cryptocurrency: 5 key differences

Digital rupee (e₹) is an exchangeable currency issued & managed by a Central Bank. Whereas, Cryptos are decentralized currency operating independently.

Is Digital rupee a Cryptocurrency?

Cryptos such as Bitcoin, ETH, etc., will not enjoy tax exemptions, except for RBI's digital rupee, which is exempt from tax regulations.

Does the new 30% Tax on Crypto include Digital rupee?

– Mitigates credit & liquidity risks – Reduces cross-border payment expenses – Sustains the global prominence of the $ – Promotes financial inclusion – Broadens access to the public

CBDCs Addressed Issues

– Eliminates single points of failure – Fund transfers between parties – Can be utilized for generating returns – Streamlines remittances

Crypto's Addressed Issues

July 2023 court rulings in the U.S. classified cryptos as securities for institutional buyers but not for retail investors on exchanges.

Countries accepting Cryptocurrency

Legal in the EU, cryptos qualify as "financial instruments" backed by the European Commission's Markets in Crypto-Assets (MiCA) regulation in June 2023.

Countries accepting Cryptocurrency

Bitcoin is legally recognized as property under Japan's Payment Services Act. China has banned cryptos but has Digital rupee.

Countries accepting Cryptocurrency

Bahamas, Nigeria, Dominica, Montserrat, Antigua & Barbuda, Saint Lucia, St. Kitts & Nevis, St. Vincent & the Grenadines.

Countries accepting Digital rupees