News:China has started testing its digital currency named e- RMB in four major Chinese cities.
- e-RMB is set to be the first digital currency operated by a major economy.
- People’s Bank of China (PBOC), the country’s central bank will be the sole issuer of the digital currency.
- This is part of China’s Digital Currency Electronic Payment (DCEP) project which began in 2014.
- Digital Currency:It is a form of currency that is available only in digital or electronic form and not in physical form.It is also called digital money, electronic money, electronic currency or cyber cash.Cryptocurrency is also a type of Digital Currency.
- It is a digital or virtual currency that uses cryptography for security.It uses decentralized technology to let users make secure payments and store money without the need to use their name or go through a bank.
- They run on a distributed public ledger called blockchain which is a record of all transactions updated and held by currency holders.
- The most common cryptocurrencies are Bitcoin, Ethereum, Ripple, and Litecoin.
- Blockchain Technology:It is a digital, immutable, distributed ledger that chronologically records transactions in near real time.It is managed by a cluster of computers and not owned by any single entity; therefore, it is decentralized.