Digital Currency is one such electronic form of flat money which is issued by government, but Cryptocurrency on the other hand is store value which is secured by encryption. Use of digital wallets upgrown with technology involved in previous decade. Government, round the globe have motivated people for switching to digital wallets from the traditional ones. It is so, because these are more convenient in various ways. During pandemic, it gained popularity cause of its contactless benefits and the use of digital wallets increased rapidly with use of cryptocurrency. This resulted in confusion with these two currencies. As people started the use of digital wallets for upholding both digital currency and cryptocurrency. Therefore both these terms had started been used interchangeably. But both these currency differ and that would be more clear to you by the following points:
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Digital Currency differs from Digital Coins
The digital currency is such which is issued by government and is the electronic form of flat money. These help in such transactions which are contactless, as the ones used for making online account transaction from certain bank to another individual account. So, digital currency is used electronically via digital walleton payment of certain product or service and on withdrawal from any ATM, it is so converted to liquid cash.
Whereas cryptocurrency is as discussed earlier, is value stored, which is secured by any encryption. They are therefore known as digital coins, which are having varieties as Ether, Bitcoin, Dogecoin, etc. All these coins are privately owned, not having any regulatory framework.
Use Of Both Digital Currency and Cryptocurrency
Digital Currency is one such electronic form of flat money which has no requirement of encryption, but as there are possibilities of hacking, so users need to have strong passwords for the same. Even the debit/ credit cards of the users are required to be safe with passwords. Digital currencies can therefore be used in transactions related with bank account transfers.
On the other hand Cryptocurrency is secured with strong encryption and for trading with Cryptocurrency, you will require bank account alongwith digital currency. As digital currency would be exchanged online so as to attain
Cryptocurrency for relative value.
Regulatory Framework
Digital currency is electronic form so it is always supported by centralised authority. Where, India is having Reserve Bank as regulatory authority for monitoring each and every transaction as well as regulating rupee.
Cryptocurrency on the other hand is solely based on decentralised system and so is free from centralised regulation. Each and every transaction is so saved in decentralised ledger which is open for all to go through.
Stable Vs Volatile
Digital Currency is much of stable nature and so has easy management of its transactions.
Whereas, Cryptocurrency is highly volatile and due to which most of the companies have not yet initiated payments acceptance.
Transparent Nature
Sender, receiver and banking authorities are the ones who can go through the transactions related with digital currency.
In case of Cryptocurrency, the details of transactions lies with public domain, as a result of decentralised ledger.
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