Digital Rupee is a digital payment system developed by the Reserve Bank of India (RBI) to
facilitate digital payments in India. It is a secure and easy mode of payment. It enables
customers to make payments and receive money from anywhere in the world. Digital Rupee
also provides an alternative to traditional payment gateways like UPI, allowing customers to
make payments without having to worry about their personal information or bank account
details being exposed. In this article, we will discuss how Digital Rupee compares with UPI
in terms of features, security and convenience.

CBDC Vs. UPI

1. The main difference is that eRupee itself is a currency in digital form, whereas UPI is
just an interface through which digital transactions are made.
2. In CBDC transactions, virtual money is transferred from one eWallet to the other.
There is no intermediary bank involved at the time of a transaction. UPI transactions
are carried out with the help of intermediary banks. Every time a transaction is made,
payer’s bank A/C is debited and money is transferred to creditor’s bank A/C.
3. With eRupee, you withdraw virtual money from your bank just like cash. eRupee is
stored in your eWallet and you can use it like paper currency when you want to, while
in UPI, you instruct your bank to pay money to vendor.
4. Digital rupee is operated by RBI. UPI system is operated by National Payments
Corporation of India (NPCI), an entity promoted by banks.
5. One more feature of CBDC is its anonymity just like cash. However, in UPI
transactions, intermediary banks have the data of parties involved.
6. Users must visit official website or app of designated bank in order to buy digital
rupee. UPI interface enables consumers to carry out online transactions using their
bank account.

In conclusion, the main difference between the two is that CBDC is a digital form of fiat
currency issued by a central bank, while UPI is a payment platform for electronic transactions
using existing bank accounts. CBDC is backed by the central bank, while UPI is not.