What is Digital Rupee and how to buy it? Here's everything you need to know

After the Union Finance Minister Nirmala Sitharaman declared in her Budget speech that the Reserve Bank of India will start issuing digital currency from 2022-23, there has been a buzz over it. This comes at a time when the Central government is planning to bring a robust policy to curb the misuse of cryptocurrency. 

It is important to note that at the Republic Economic Summit in November 2021,  Union MoS Electronics & IT Rajeev Chandrasekhar had hinted at the introduction of an official digital currency. 

What is Digital Rupee? 

The digital currency by the Reserve Bank of India will be based on blockchain technology, the technology behind Bitcoin and other popular cryptocurrencies. As per the FM's announcement, this would pave way for a more efficient and cheaper currency management system. However, no clarity on the future of Bitcoin and other cryptocurrencies was provided. 

"The introduction of central bank digital currency will give a big boost to the digital economy. Digital currency will also be a more cheaper and efficient currency management system. It is therefore proposed to introduce digital rupee - using blockchain and other technologies - to be issued by the Reserve Bank of India, starting 2022-23", FM Sitharaman said while presenting the Budget. 

How to buy it? 

As the Reserve Bank of India is set to issue the Digital Rupee this year, the central bank will soon provide details to the buyers as to how to and when to purchase it from. It can be assumed that the process of purchasing the Digital Rupee could be similar to that of Bitcoin or other cryptocurrencies. 

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 was listed for getting it passed in the Winter session of Parliament last year. It was aimed at creating a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India. The bill also sought to prohibit all private cryptocurrencies in India except for certain exceptions to promote the underlying technology of cryptocurrency and its uses. However, the Centre deferred the introduction of this bill for the foreseeable future.