Check out the difference between a digital currency and cryptocurrency

Home » Check out the difference between a digital currency and cryptocurrency

Cryptocurrency has become a popular phenomenon today. Today, youngsters are showing much interest in exploring the decentralized monetary world by searching numerous topics like the most profitable proof of stake digital currency or which are the most profitable coins to stake, etc. Well, today we are going to upgrade your knowledge by pointing out the difference between a digital currency and a cryptocurrency.

Ever since there is news about the launch of a digital currency by RBI in India, as stated by Finance Minister Nirmala Sitharaman in the 2022 Budget session, there has been much craze about digital currency among crypto enthusiasts. Most people might think that digital currency is a synonym for cryptocurrency. But it is not. Some factors can set the difference between the two. 

So to know what makes digital currency different from cryptocurrencies like Bitcoin, Dogecoin, etc, let us understand them one by one. 

The basic difference between a digital currency and a cryptocurrency

To point out the difference between a digital currency and a cryptocurrency, first, let us briefly know about the former. A digital currency can be explained as a kind of fiat currency that you have in your wallet or that can be withdrawn from your nearby Automated Teller Machine (ATM). A similar currency is supported by an authority like RBI in the case of Indian currency. One can exchange it for real currency. The launching of CBDC is expected to be launched by the next year (2023). 

Now coming up to the next which is cryptocurrency. Unlike fiat or digital currency, it is not under the control of any centralized organization or individual figure. The power of exploring its use lies under a user community. On a technical note, cryptocurrencies are a chunk of codes that are made via the mining process. Their management is done through a digital ledger technology called a blockchain. 

This is to ensure clarity in every stage of its transfer. When it comes to non-fungible tokens or metaverse, then there are various uses of top crypto coins like BTC and ETH. But they won’t function exterior to their underlying decentralized and distributed technology (blockchain). 

After knowing the basic idea about their difference, now let us flock on to more other differences. 


The major difference between a digital currency and cryptocurrency lies in the question of who has authority over the monetary value of one’s coins? In the case of digital currency, the Reserve Bank of India or the Federal Reserve system in the United States along with a third party, banks, and government join to set up the currency value. 

On the other side, cryptocurrency adheres to a clear process starting from mining and holding to crypto-assets transfer. Their value is free from geopolitical issues and the authorities of central banking. 

Encrypting method

The next major key factor that defines the difference between the two is encrypting method. Here cryptocurrency outshines digital currency. Digital currencies are mainly e-cash that is free from any original methods for their encryption. Contrary to them, cryptocurrencies operate upon blockchain technology. These coins are stored in wallets and provide a greater level of cyber security. 

Other than these, picking a reliable crypto trading platform with the best security provision and ample range of currencies to transact, with is the main need for transactions with crypto use. Indian exchanges like WazirX perform this task with trust and are highly preferred to begin one’s crypto journey. So if want to trade cryptocurrency here, you need to open an account here.


There has clarity in all the transactions detailed in the public domain. Kudos to the decentralized digital ledger technology blockchain, where all the records have record via the chain of blocks. In the case of digital currency, there is an involvement of banking authorities with the sender and receiver. 

But same is not the case with digital currencies. Here it would involve bureaucratic interference and other problems during any conflict. And this is why cryptocurrency excels over it in getting worldwide acceptance.


In fact, The next major point that classifies the difference between digital currency and cryptocurrency is solidity. As mentioned above, digital currency has an approved fiat version currency that has trade and has in the knowledge of a vast population. This defines its solidity in comparison to cryptocurrency which might have garnered ample attention but is still struggling to reach the mainstream level. However, there are countries where they have got legal status. El Salvador and now India are examples. 

Final words

So these are some of the main differences between a digital currency and cryptocurrency. Now you know that they are not a synonym for each other. To explore other topics like proof of stake profitability, log on to one of the best crypto websites, Cryptoknowmics. As well as, It is the one-stop solution for all crypto-related queries. Sign up soon on this crypto website, if you haven’t yet.  crypto write for us

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