The Idea of Digital Currency for India based on Blockchain Technology: A Conceptual Study

Abstract

This paper aims to explain the idea of digital currency, its prospects in the Indian context, its role in digital transformation, and how it would be beneficial to our country, businesses, and different user segments. As in the phase of digital transformation, a constant improvement in technology is happening day by day globally. In today's virtual world, where everything is on its way forward, why should we not develop our economy accordingly so that we will be able to strengthen ourselves globally? And we had to begin the work of transformation by converting our currency to digital mode, i.e., digital currency, which is accessible in virtual or electronic form rather than physical.
 The paper opted for an exploratory study using existing literature, case studies, books, electronic resources, speeches of various officials of the central bank, and experts on national as well as international platforms, which gave clarity on some of the core elements involved in digital currency, like the concept of blockchain with its kinds and segments like wholesale & retail and also with use case data in different counties across the globe, strengths, and weaknesses; initial coin offerings (ICO); and central bank digital currency (CBDC).
 In this paper, data were complemented by documentary analysis, in which literature like the concept note of the Reserve Bank of India, the discussion paper of the Bank of England, and existing literature regarding centrally backed currency were studied for the clarity of the above work through figures like the money flower issued by the BIS (Bank for International Settlements). The paper concludes with discussion, suggestions, and future directions, with the conclusion that the user segments for the virtual currency backed by a central bank are classified.