Difference Between Digital Currency And Cryptocurrency

The world is rapidly shifting towards more of a technology-oriented population. We used to have only one mode of telecommunication, phone calls. We have more ways to communicate, from social media, video calling, text messaging, and whatnot. 

The world moved even further when the currency mode also started to change the way we pay and trade. We have digital currency and Cryptocurrency simultaneously besides the regular fiat currency. 

Especially during the pandemic, digital wallets became more prominent as a payment method. This is because it helped with contactless payment.  Also traders are in love with what they term crypto arbitrage. This is a process of buying Cryptocurrencies in one website and selling it to another. 

Bitcoin users use faucets like moon bitcoin cash to legally increase their Bitcoin. 

But many people mistake digital currency with Cryptocurrency. This article will help to clear your confusion about digital currency and Cryptocurrency. 

Digital Currency & Cryptocurrency: The Difference

The primary difference between Cryptocurrency and Digital Currency is, Digital currency is the electronic form of regular fiat currency via bank transaction, but Cryptocurrency is not. We can use fiat currency via electronic bank transactions. 

In such cases, the bank acts as an intermediary to oversee and facilitate your transaction. But Cryptocurrencies are decentralised, meaning that there is no intermediary to interfere. We have an elaborate discussion of the difference between these two new modes of transaction in this article. 


Cryptocurrencies are decentralised. An individual in possession of Cryptocurrency can send their money to whoever they want and wherever they want. There is no third party like the central bank or the government to interfere in your transaction. Therefore, the transaction is a p2p type since there is no third party to oversee it.  

When you are using digital currency, you are using the electronic form of your regular fiat money. In such a case, the bank needs to allow the transaction process for you to complete the transaction. Without the bank’s allowance, you cannot make a transaction although it is your money. 


There is a lack of transparency in digital currency transactions. You cannot choose the location of the wallet to send your money. You also cannot see all the money transfers since the beginning. All the transaction information stays confidential in the grasp of the bank. 

But you get more transparency with Cryptocurrency transactions. Every member of a Blockchain can see the transaction records. They can see all the transactions made by any user and who the receiver and sender are. Blockchain is a public ledger that keeps records of all the transactions. 


This is the point where Digital currency has defeated Cryptocurrency. Digital currency or electronic fiat currency is a government-issued currency. It has the national assets to back up its value.  

If the value of any fiat currency were to fall, then the government could sell assets to stabilise it. They can also take loans from the global bank to keep the currency stable. 

But Cryptocurrencies do not have any assets to back up their value. The only value of them lies in the demand of a certain Cryptocurrency. The Blockchain of some Cryptocurrencies offers the creation of dApps and other technological use cases. 

The real value of any Cryptocurrency lies in its Blockchain. 

But there are some Cryptocurrencies with backup assets called Stablecoin. 


Digital Currencies have no encryption. Yes, the users need to secure their wallets with a strong password. They also need to protect their credit/debit card with a strong password to be safe from theft. But there is no end-to-end encryption when you are making a digital currency transaction. 

But Cryptocurrency transactions are end-to-end encrypted to provide the best security for the users’ digital assets. Therefore, theft of Cryptocurrencies is almost impossible with the strong security of the Blockchain. 

Transaction Speed  

When you make payments using Digital currencies from your smartphones wallet, the transaction speed may bother you. This is because you need to wait for the bank to process your transaction. Sometimes electronic bank transactions also fail due to the technical difficulty of the bank. 

Cryptocurrency will not disappoint you in this case. Cryptocurrency transactions are extremely fast. The users only need to have a Cryptocurrency wallet and internet connection. The decentralised nature of Cryptocurrency makes it a better payment method in terms of speed.

Transaction Fees 

Digital currency transactions take a hefty amount of transaction fees. When you are making a transaction using your digital wallet, you have to pay a considerable amount. But cryptocurrency transactions would cost you fewer fees for any amount of transaction. 

Also, Cryptocurrencies have the same value in every part of the world at a certain given time. But different fiat currencies vary in their prices across the world. 

Bottom Line 

Although there are many differences, both of the currencies are now relevant in the economic world. For example, digital wallet transactions have been very useful to us during the pandemic. In addition, many businesses are now also accepting Bitcoin as payment. 

The fast acceptance of Cryptocurrencies means the world is moving towards a new direction in terms of transaction and payment.

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