 In today's increasingly globalized world, financial governance needs to be responsive to rapidly changing market conditions and technological advances. Innovations in financial governance can help to ensure that organizations and governments remain ahead of the curve and remain competitive in ever-changing landscape. The latest innovation in our financial world is digital money or E-European. Let's get to know all about it. Digital money or digital currency? Is any form of money or payment that exists only in electronic form? Digital money lacks a tangible form such as a bill, check or coins. It is accounted for and transferred using electronic codes in computers. In India, Reserve Bank of India has made available E-Rupi under a pilot project. How will it be any different from digital money you transact using UPI? To transfer money through UPI, you have to make a request and forward it to your bank. Your bank deducts the amount from your account balance and transfers it to your wallet and subsequently to beneficiary account. Not only this, the bank also triggers an elaborate clearing and settlement process to ensure a fair and proper transaction. So, there is a chain of intermediaries who enable this transaction. On the other hand, in case of digital rupee, you don't need intermediaries at all. You can simply transfer digital money from your wallet to another wallet, just as you would hand over the physical cash. The transaction is final, the settlement is final. It is like physical cash, just that it is entirely digitized. How does one get this digital money for transaction? You need to install the CBDC app or Central Bank Digital Currency app and use a phone number linked to a bank account. Once you register successfully on the app, you will be assigned a digital wallet with a unique ID. You can then load your wallet by transferring money from your bank account. The app will let you pick currency in the denomination of your choice. For example, for loading 1000 rupees, you can ask for 2 500 rupee units or 10 100 rupee units or 1 500 rupee unit and 500 rupee units. Once you confirm, your digital wallet will be loaded with your choice of denominations. What is the utility of digital money? Let's say you want to transfer a large sum of money. If you do it with the bank, the bank may impose restrictions regarding amount or frequency. Or in case of a new account, you may have to wait for the bank to authorize this transaction. However, if it is digital rupees stored in your wallet, you should be able to transfer the money instantly, at least in principle. Though RBI may still impose caps or offer you the option of setting restrictions that suit you best. In theory, it is like having a pile of cash in your home that you would be able to hand it over to anybody if you so wish. Since it is like cash resting in your cupboard only digitized, the e-rupee will not be earning any interest sitting in the digital wallet. What problem does it solve? It can solve some problems persistent with physical cash. Think about how tough it must be to print, transport, store and distribute physical money. It involves huge amount of logistics and is very expensive. If you could replace this cash with digital currency, that could save a lot of money. The future Well, the future prospects and variations are wide open. One could be programmable money. How would that work? Say for example, if the government is thinking of extending fertilizer subsidies to farmers, they could load the wallet with pre-programmed money. In other words, e-rupees that could only be spent on fertilizers. And this money could also be tracked. Well, there is no dearth of options and possibilities with regard to digital money. It can change our world completely and drastically. For all that, we will have to wait and see how this pilot pans out.