Digital money
Also called: electronic money · Topic: Money: From Barter to Digital Currency · NCERT: Class 7, Ch 11 "From Barter to Money"
Meaning
Digital money is money in electronic form. You cannot touch it. It moves through debit and credit cards, net banking and UPI instead of coins and notes. Most digital payments do not create new money. Cards, net banking and UPI are channels (routes for payment). They move existing bank deposits from one account to another. Digital money matters because it supports a cashless society, built on Jan Dhan accounts, Aadhaar-enabled payments, e-wallets and wide mobile-phone use.
Example
Krishnappa's fruit cart has a QR code (a printed square pattern that a phone camera can read). A customer scans it, and the payment moves from the customer's bank account straight into Krishnappa's. No cash changes hands.
Don't confuse with
- e₹ (CBDC): this is currency issued by the central bank in digital form. Like a note, it is a direct liability of the RBI. It is not bank-deposit money travelling through a channel. RBI pilots began in 2022.
- Cryptocurrency (e.g. Bitcoin): it is neither legal tender nor money in India, because no sovereign guarantee backs it.