Obnews Tech Desk: Digital currency is the currency present in an electronic form, which is only used for transactions through digital means. It has no physical form, such as notes or coins. This currency operates on the Internet or a particular network itself and is becoming increasingly popular.

Major types of digital currency

1. Cryptocurrency:

It is a decentralized currency based on blockchain technology. For example, Bitcoin, Etreum, Ripple etc. are the major cryptocurrency.

2. Central Bank Digital Currency (CBDC):

It is the official digital currency issued by the central bank of a country. The example of this in India is “Digital Rupee”, which has been released by RBI.

3. Virtual currency (virtual currency):

They are usually manufactured by private organizations or developers and are used on a specific digital platform, such as gaming currency.

Major features of digital currency

• Fast and safe transactions
• Paperless and cashless system
• Global access
• Focal or decentralized control
• Blockchain and encryption technology based security

Benefits of digital currency

• “Transparency and real time tracking are possible in transactions.”
• Low transaction fees
• Simplicity in cross-border transactions
• There is no possibility of fake currency
• Better option for the environment (paperless transactions)

Digital currency losses

• “The risk of hacking and cyber fraud increases.”
• Requirement of technical knowledge
• Excessive fluctuations (especially in cryptocurrency)
• Lack of clear regulation by the government
• Offline transaction is not possible

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Financial new part of the world

Digital currency is becoming an important part of the future financial world. Through this, not only financial transactions will become sharp and transparent, but also a cashless economy at the global level. However, the risks and technical challenges associated with it also cannot be ignored.