Digital currency vs Cryptocurrency, the What, the Progress and the Future

Digital currency vs Cryptocurrency

You can either change your Canadian dollar into Rupee at home, or like most people buy some paper Rupee when you land in the local airport, when your cash is about to run out, you find an exchange shop and buy some more. You might find that inconvenient to pack these paper, money, or looking for foreign exchange. You're also probably worrying.Buy BitCoin & Crypto OFFER Someone's going to steal it. Now, imagine this you'll do your exchange at home. Then digital wallet. Then put your Rupee there. The digital wallet are accepted by all merchants and people in India so that you don't need to carry any paper cash anymore. You don't need internet connection to make a payment. This is central bank digital currency. Unlike the cash balance, your bank account central bank digital currency doesn't require you to open up a bank account. Central bank creates the money. They can even directly put money into your digital wallet. These digital currency have the exact same use of value as paper, money, except for they only exist in digital form, meaning you can't go to the bank or ATM and convert them to paper cash. Digital currency is not something new. They already exist in many forms, mostly known as cryptocurrency, such as Bitcoin, Ethereum, tether or XRP. But unlike central bank, digital currency, these currencies are not issued or managed by a central authority. Some of them operate under the blockchain public ledger, some under its own network and protocol. Central bank digital currency on the other hand are issued and backed by the country's central bank. Within a country, It can make sure everybody accepted as a form of payment, but why all of a sudden in the past three years central bank around the world started pinching the idea of digital currencies. And more importantly, how are these so-called digital currencies is going to impact us? An increasing number of people believe cryptocurrencies like Bitcoin is the future of finance. Since there are only 21 million Bitcoins to be mined in total. Bitcoin earned his name, the digital gold. First of all, people don't love cryptocurrencies for no reason. Using cryptocurrency like XRP, moving money across the border. It can take as little as three seconds. Payments are quickly sent and received in the local currency on either side of a transaction. There's no bank interference and much lower fees making cross border transactions using Bitcoin. Unlike bank records your every transaction Bitcoin transactions take place only between you and the receiver. Maybe the best feature of the cryptocurrency is that it makes cross-border transaction much faster with no third party involved, thus much lower cost. But these cryptocurrencies also have disadvantages. If buying coffee takes 10 minutes, it's probably not a very pleasant experience. And that's how it feels when you shop using Bitcoin. It's notoriously slow. Cryptocurrencies prices are extremely volatile, which makes majority of the merchants around the globe, don't take them as a form of payment. Most cryptocurrencies are mainly used for trading, which was largely driven by speculation rather than intrinsic values because the transactions are confidential and no regulation is put in place. Bitcoin was used for gambling left market trades and illegal payments each year, criminals laundered billions of dollars using crypto exchanges. Despite its scarcity, Bitcoin is probably far from being the gold in the world of digital currency. Along with cryptocurrencies, in 2019, Facebook announced his plan to launch its own digital currency Libra. With billions of users. These tech giants could seriously threaten the monetary sovereignty of the  bank. This makes  banks begin to think about monetary alternatives. According to the bank of international settlements in 2020, 80% of the  banks around the worldBuy BitCoin & Crypto OFFER are engaging some work in CDBC. Some country has already launched the CDBC such as Brazil. Some countries are actively piloting. For example, People's bank  With most central banks actively researching and piloting their new digital currencies. Now it becomes pretty convincing that something new is coming, but is it going to bring a big change in our lives. , but some users say they prefer existing shopping tools like Ali pay. With the day-to-day payment, paying using central bank digital wallet or existing payment app like Wechat, pay or Alipay, doesn't really make a difference.. If used domestically, you probably won't feel much of a difference, but when you make cross border transfers, CDBC might come in handy. Now it takes days when you're trying to send money to friends or family in another country, not mentioning the hefty transaction fee central bank, digital currency may take minutes or even seconds at a lower cost. The exact technical details is yet to be designed and maybe many years ahead, but it's good to have a better alternative to transfer money using SWIFT, which is honestly ancient. According to the world bank, over 22% of the adult around the world have no bank account or payment service account. More specifically in China, there are still 60 million people And these CDBC can be used without internet connection while CDBC can make cross border transfer much faster and at a lower cost, just like cryptocurrency is not without its own risks or concerns. Unlike Bitcoin CDBC in nature is centralized. Any central bank controls the supply, some intends to use distributed ledger technology like blockchain, which makes transactions anonymous and traceable. Some don't use blockchain, which allows the central bank to track every transaction. For example, China's CDBC. if every transaction you made with the CDBC is on central banks book. The good part is they're able to analyze consumer behavior to manage the economy better. They can detect any illicit flows of funds, such as money laundering or terrorist financing. For some of you, you may not want someone to monitor what you're paying for all the time. For others, transaction data is already in banks' book or third party service providers like visa or Wechat. So they may be okay with it. Put that aside digital currency could disrupt the current financial system. Your deposits are the commercial banks are banks' major source of funding. Central bankBuy BitCoin & Crypto OFFER. Digital currency could be a direct competitor to commercial banks. When you convert your cash in your bank account into CDBC, it causes commercial bank losing their major source of funding, which may result in higher deposit rate, Interest rate for loans. Moreover makes it difficult to provide a credit needed to fuel the economy. All those central banks around the world are actively researching and piloting their own digital currencies, the actual design and implementation maybe years, and then making exactly how it will play out