Digital Currency: The Role of World Trade with Reference to India

The Central Bank digital equivalent of fiat currency supported by the government is called Central Bank digital currency (CBDC). This type of digital currency is promulgated by the “central bank of any country”, which is associated with the national currency. The same would apply to India's “digital rupee”, which will be supported by RBI, the country's central bank. At present more than a hundred countries worldwide are working on developing CBDCs, which are in varying stages. Though CBDC is predominantly persuaded by “bitcoin”, the perception of CBDCs is distinguished from decentralised “virtual currencies” as well as “crypto assets”, those were neither disseminated by the union nor having the dignity of “legal tender”. This present study clarifies the concept of digital money, its differences with “cryptocurrencies”, the reason behind the recent boom in acceptance theoretically and its importance in international trade.