ICITSS PROJECT

Submitted By:
Submitted To:
Group 1Roll No. Name Mr. Gauri Shankar
Registration No.
1 Aditya Aggrawal CRO0729165 Gupta
2 Akash Dixit NRO0544287
3 Akshat Khandelwal CRO0695997
5 Aniket Arora NRO0503074
6 Ankit Bishnoi CRO0702782
7 Anurag Bharti NRO0521011
8 Ayush Jadon NRO0489786
10 Deeksha Goyal CRO0768259
11 Devayani Anilkumar NRO0493107

1
DIGITAL
CURRENCY
Acknowledgemen
t
We would like to thank Mr. Gauri Shankar Gupta, our mentor
and Gurugram Branch of NIRC for their support and guidance in
completing our project on the topic Digital Currency. It was a
great learning experience.
We would like to take this opportunity to express our gratitude to
all of our group members and all the fellow students for their
valuable inputs.

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INDEX

5-6
MEANING
 7-8
HISTORY
 TYPES 9-11
 BITCOIN 12-15
 DIGITAL RUPEE 16-18
 IMPACT OF 19-21
DEMONITISATION 22-24
 IMPACT OF UPI
25-26
 PROS
27-29
 CONS
30-31
 FUTURE PROSPECTS
Meaning of
digital
currency

A Form of Currency that exists only in

digital or electronic form and that can
operate independently of a central bank.
It is also called digital money, electronic
money, electronic currency, etc.
 Digital currency reduces overall cost of operation
drastically as compared to paper [Link] is
more environmental friendly as there is no need
of paper.
 Electronic money is money which exists only in banking computer
systems and is not held in any physical form. Electronic money,
or e-money, is the money balance recorded electronically on a
stored value card.

 It may refers to several systems which enable a buyer to pay electronically by

transmitting a unique number ( called digital certificate ) similar to a bank note
number. In economic terms, electronic money is monetary value provided by
the issuer on demand , expressed in government or private monetary units
stored in electronic form on an electronic device.

 Both virtual currencies and cryptocurrencies are types of digital currencies.

HISTORY OF CURRENCY IN
INDIA
BARTER COINS PAPER ONLINE
GOLD
EXCHANGE NOTES

SHELLS
COW ATM BANK ONLINE
& METALS
S
BEADS
 DIGITAL CURRENCY IN
INDIA
 The reserve bank of India is set to launch the pilot of its
central bank digital currency (CBDC) which it categorizes
as legal tender in a digital form. Commonly known as the
digital rupee, it will be exchangeable at par with existing
currencies and will be considered acceptable for payments
and a safe store of value.
 E- rupees will be issued in the same denominations as per currency &
coins, and will be distributed through the intermediaries, that is banks.

 Transactions will be through a digital wallet offered by the participating

banks and stored on mobile phones and devices.
 Types of Digital Currency

Centralized Decentralized

 Centralized digital currency  Decentralized digital

is a form of Fiat Money currency is a type of
issued and regulated by the unregulated digital
government money.
 Do not derive their value  It gains its value from the
from users; instead comes people who uses it, and
from the authority of its does not rely on any
issuing body. bank, authority or third
 Examples : Central Bank party
Digital Currency (CBDC)  Examples : Bitcoin
 Major Kinds of Digital Currency

Central Bank Digital

Cryptocurrency
Currency(CBDS)
Fiat currency
 Designed using issued by
Virtual Currency Central Bank
cryptography.  Form of
 Peer-to-peer of a country.
unregulated  Accessible to
network and
digital money general public
works on  Issued and  A digital form of
decentralized
controlled by cash
form of 
its developers Two types:
technology  Used and Retail CBDCs
(blockchain)
accepted and Wholesale
 Alternative form
among the CBDCs
of payment 
members of a Example:
through
specific Digital rupee
cryptocurrenc
virtual in India and
y wallet
community Sand Dollar in
 Mostly
Digital Currency V/s Virtual Currency V/s Cryptocurrency

All virtual currencies and cryptocurrencies are

digital currencies. However, not all digital
currencies belong to those two categories. For
example CBDCs are not virtual currencies or
1
cryptocurrencies.
Digital currencies can be regulated or unregulated.
One example of a regulated digital currency is
CBDC. Examples of unregulated digital currencies
are Bitcoin and Ethereum. The overwhelming
majority of virtual currencies are unregulated,
while cryptocurrencies are not regulated in any
2
jurisdiction.

Not all digital currency are secured by cryptography.

Cryptocurrencies always uses cryptography to
secure their networks, while virtual currencies may
or may not use cryptography to secure their
3
networks.
Bitcoin Introduction

 Bitcoin is a digital currency -- also called cryptocurrency --

that can be traded for goods or services with vendors
that accept Bitcoin as payment.

 Bitcoin (abbreviation: BTC; sign: ₿) is a protocol which

implements a highly available, public, and decentralized ledger.
In order to update the ledger, a user must prove they control an
entry in the ledger. The protocol specifies that the entry indicates
an amount of a token, bitcoin with a miniscule b. The user can
update the ledger, assigning some of their bitcoin to another
entry in the ledger. Because the token has characteristics of
money, it can be thought of as a digital currency.
Working of a Bitcoin
 LEGAL STATUS, BAN AND
REGULATION
 Bitcoin is legal in seven of the top ten world economies by GDP in
2022, including the United States, France, and Japan The legal status
of bitcoin varies substantially from country to country and is still
undefined or changing in many of them. Regulations and bans that
apply to bitcoin probably extend to similar cryptocurrency
systems. Because of its decentralized nature and its trading on online
exchanges located in many countries, regulation of bitcoin has been
difficult. However, the use of bitcoin can be criminalized, and shutting
down exchanges and the peer-to-peer economy in a given country
would constitute a de facto ban.
 According to the Library of Congress, an "absolute ban" on trading or
using cryptocurrencies applies in nine countries: Algeria, Bolivia,
Egypt, Iraq, Morocco, Nepal, Pakistan, Vietnam, and the United Arab
Emirates. An "implicit ban" applies in another 42 countries, which
include Bahrain, Bangladesh, China, Colombia, the Dominican
Republic, Indonesia, Kuwait, Lesotho, Lithuania, Macau, Oman, Qatar,
Saudi Arabia and Taiwan. On 22 October 2015, the European Court of
Justice ruled that bitcoin transactions would be exempt from Value
Added Tax
CRYPTOCURRENCY(BITCOIN) VS
CBDS'S
 Cryptocurrencies are independent digital currencies that run
on the principle of decentralisation and without predetermined
value or backing. Bitcoin (BTC) and Ethereum (ETH) are
examples of such cryptocurrencies.
 In contrast, CBDC has the backing of central banks. For
example, the RBI has given the name of its CBDC as “Digital
Rupee”. China’s proposed CBDC is digital yuan (e-CNY).
 Another difference is that while cryptocurrencies use a
permission-less open network, CBDCs use a private Blockchain
network that has prior permission.
Digital Rupee

 The Digital Rupee (e₹) or eINR or E-Rupee is a tokenised digital version of

the Indian Rupee, to be issued by the Reserve Bank of India (RBI) as a
central bank digital currency (CBDC).The Digital Rupee was proposed
in January 2017 and will be launched in the 2022-23 financial year

 The Digital Rupee would be issued in the same denominations that

paper currency and coins are currently issued

 Digital Rupee launched by RBI in a phase wise manner for retail segment
in cities of Bengaluru, Bhubaneshwar, Delhi & Mumbai on 1st Dec,
2022
Cryptocurrency Vs Digital Rupee

 Digital Rupee (e₹) is a Central Backed Digital Currency (CBDC)

which is similar to regular currency notes issued by the RBI but in
electronic form
 CBDC can’t be exactly compared to cryptocurrencies.
 Cryptocurrencies are based on block chain technology where
each transaction is publicly recorded for anyone to see. e₹
though said to be based on block chain technology, records of
any transaction will not be publicly available
 It won’t be a decentralised asset like cryptocurrencies. Digital
rupee will be a currency issued by central banks responsible for
governing and managing the asset.
How will e₹ work?
 could be used to make and receive payments via QR codes or through
Digital Rupee Wallets held by payer and payee
 UPI transactions involve entries in two bank account statements
which are maintained by commercial banks. e₹ would not make an
entry in your commercial bank accounts and it's records
would be maintained by RBI itself centrally
 You can buy digital currencies from selected banks even if u don't
have an account with them. Generally, it would be much like cash
withdrawal from your bank account where instead of
receiving cash, banks would credit your e₹ wallets and you'll be
good to transact it like traditional cash.
IMPACT OF DEMONISATION
This time of economic crisis indirectly taught
its 1.3 billion people that cash was unreliable
- one day there, the next day gone, cash
shortages and several deaths from people
queuing to exchange their worthless money
A significant disruption to the economy
occurred with more of India’s largely younger
population turning to digital currency. At the
time, a large number of industries were
already using Bitcoin and shortly, thereafter,
the number of investor grew to the point
where mid- 2017, 2,500 Indians invested in
Bitcoin daily, according to The Economic
Times.
Six years and a pandemic later, India has taken to digital adoption at a
never-seen-before pace. According to the National Payments Corporation of
India data for October, transactions made through unified payments
interface (UPI) stood at Rs 7.7 lakh crore, through over 400 crore
transactions.
In 2016, only one big digital wallets company, Paytm, existed. Since then,
PhonePe, Google Pay, Amazon Pay, and several such UPI-enabled companies
have become household names. From the street-side vegetable vendor, to
the neighbourhood grocery shop, everyone now has a digital payment
option to circulate digital currency.

After Demonization more than 500 merchants in India and five of India’s
largest companies, including Dell, accepted the digital currency as payment.
The number grows by daily now.

Bitcoin is far from popular, and most Indians prefer fiat money, but a recent
Forbes article reports Bitcoin's craze is catching on and that, to date, there
are more than 600,000 users in the country.
Demonetisation may not have impacted
directly, but it has definitely triggered
interest in all things cashless, including
digital currency.
People are looking at options to transact
without using cash.
In the case of bitcoins, they’re also
trying to speculate and pocket some
gains…
Many of our users are also using digital
currency as an investment vehicle.
A few people residing abroad are using
our platform to remit money back home
as well
INDIAN UPI CAPTURING
GLOBAL MARKET

INTRODUCTION –
UPI is a unified platform that enables users to merge and manage
multiple bank accounts on one single platform and conduct
various banking activities.
Reason Behind Taking UPI
Global
User-friendly Payment for Cross-Border Travel
 With UPI, Indians will no longer need to carry a Forex card or the nation’s
currency to make transactions. Just like their debit or credit cards, they’ll be
able to make payments via UPI.
 Exploring International Business Propositions
 Besides making the technology excel in the domestic market, the Reserve
Bank of India is also exploring International Business Propositions. By
exporting the technology to other economies of the world, India will be able
to
 Streamline Use of UPI in International Market
 The National Payments Corporation of India has launched a dedicated
international subsidiary called the NPCI International to look after all the
foreign operations, adoptions. and expansions in various countries.
 Countries Adopting UPI Global
 Listed below are some countries that have/ are in plans to adopt UPI.
; [Link] [Link] [Link] [Link] [Link]
How Does UPI Global Work?

 NPCI International Payments Ltd (NIPL) has signed agreements with

various leading global providers of local payments infrastructure. (For
instance, PPRO) The aim is to expand and empower the growth of
India’s digital payments ecosystem in the international market.
 The agreement between the two parties aims to increase the adoption
of UPI across all of PPRO’s global clients.
 These would ideally include payment service providers (PSPs), and
global merchant acquirers among others.
 This will help Indians travelling to distant locations transact easily on
foreign land, not worry about carrying a Forex card or the tourist
designation’s local currency and enjoy their travel.
 Now, businesses may also choose to accept UPI payments through
payment links, QR codes, or webb/app payment gateway integrations
 PROS
 Decentralised and Autonomous - Digital
currencies, as opposed to traditional hard currency, are decentralized,
which means they are not governed by a single entity. You have more
control over how your money is managed because banks and governments
aren't involved in your transactions.

 Fast, Mobile Payments Online - The functionality of

digital currency payments is the same no matter the quantity or distance,
and they are also simple to make online via mobile devices.

 Discrete and Confidential - When using fiat currency,

third parties including credit reporting agencies, banks, collectors, and
marketers record and manage a large portion of your financial history. Not
the case with digital money.
 Security - Once authorized, transactions using digital currency
cannot be undone. Digital currencies are empowered by blockchain
technology, making them virtually impossible to counterfeit or duplicate.

 Minimal Fees - Blockchain technology's networking framework

does away with the requirement for intermediary entities to conduct
transactions. You'll find it simple to monitor the transaction and maintain
track of your money, and you'll spend less in fees than you would if you
were transferring fiat currencies.

 Safer for Merchants - A increasing number of businesses

are seeking to use digital money more frequently because they believe
it to be the future of commerce.
 CONS OF DIGITAL
CURRENCY
1. Asset prone to volatility 2. Security issues

 Currently, most digital currencies  While digital currencies

are decentralised, so they’re not remove the need for storing
backed by a government or your personal details online,
central bank. the currency you own may
 still be vulnerable to hacks.
This means they can lose or gain
value very quickly.  There have been a number of
 cases of companies holding
Those who trade in digital
currency having it stolen in an
currencies can possess
attack.
something worth a lot one
minute, but if the value dips, they  Traditional banks can also
can lose value rapidly. offer a wider range of security
and compensation for those
that have their funds stolen.
 4. More accessible for
3. Lack of regulation criminals

 The established financial  Most worrying is that this

industry is heavily regulated, increased access can open
which helps to add stability and the currency up to criminal
ensure there is no elements looking to exploit it
unacceptable activity. for their needs.
 Digital currencies currently  Authorities are most
exist on the outside of this concerned about digital
regulation for the most part, currencies being used for
which provides the user with money laundering or to fund
freedom but also means they illegal activities.
are prone to more unsavoury
practices.
5. Uncertainty for the future

 Unlike traditional forms of payment that have stood the test of time
and look to have a solid future, digital currency is still new and very
much in the early stages of development.
 Because of this, the outlook is uncertain, and there’s no guarantee
that the funds you hold digitally will continue to be usable or retain
value.
 WHAT’S NEXT?

 Withthe popularity of digital currencies

increasing day by day, Governments all across
the globe will be making regulations on them.

 CBDC, which might be issued by a nation's bank

or monetary authority, are still another potential
application. About 90% of the countries are in
some way developing CBDC technology. Hence,
they are expected to be common in the coming
years.
 The current state of digital currencies provides
many opportunities for players in the
infrastructure layer to come and gain huge
market share. Still, collaboration and
compliance with regulators will be key to the
long-term success of the industry and economy.
 By employing blockchain and related
technology, private businesses and
governments can cut the cost of their overall
money operations across public and private
channels by 4-5 times. This, in turn, can create
more value for the nation.
THANK YOU