Digital Currency

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    In News 

    • Over seven per cent (7.3%) of India’s population owns digital currency, according to the UNCTAD.

    More In News 

    • The use of cryptocurrency rose globally at an unprecedented rate during the COVID-19 pandemic.
      • Ukraine topped the list with 12.7 per cent, followed by Russia (11.9 percent), Venezuela (10.3 percent), Singapore (9.4 per cent), Kenya (8.5 per cent) and the US (8.3 percent).

    About Digital currency

    • It refers to any means of payment that exists in a purely electronic form. 
    • It is accounted for and transferred using online systems. 
    • One well-known form of digital money is the cryptocurrency Bitcoin.

    Issues 

    • If cryptocurrencies become a widespread means of payment and even replace domestic currencies unofficially (a process called cryptoisation), this could jeopardise the monetary sovereignty of countries.
    • Unstable financial asset also carries social risks and costs

    Cryptocurrency 

    • It is a digital currency that can be used in place of conventional money.
    • It is a medium of exchange, such as the rupee or the US dollar, but is digital in format and uses encryption techniques to both control the creation of monetary units and to verify the exchange of money. 
    • In cryptocurrencies, cryptography is used to secure and verify transactions.
    • It is also used to control the supply of cryptocurrencies.
    • It is supported by a decentralised peer-to-peer network called the blockchain.

    Source:BS

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