TheReserve Bank of India is looking at the brave new world of cryptocurrency. Thesuccess of it may have encouraged the Central Bank to consider its owncryptocurrency since it is not comfortable with non-fiat cryptocurrency. Thenumber of users are increasing day by day. The company launched in 2015, saidthe increasing downloads highlighted the growing acceptance of Bitcoins as oneof the most popular emerging asset classes. A group of experts at RBI isexamining the possibility of a fiat cryptocurrency which would become analternative to the Indian rupee for digital transactions. RBI’s cryptocurrencycould be part of creating its own Block chain, a distributed digital ledger andtechnology that supports cryptocurrencies. Thetechnological developments over the past 50 years definitely affected paymentsystem in the world.

The records and ledgers have been converted from paper toelectronic form. The emergence of low cost technology has allowed to emerge newpayment system like mobile money schemes. Despite of new technology the basicstructure of centralized payment system has remained unchanged. A digitalcurrency scheme incorporates both a new decentralized payment system and a newcurrency. Most digital currencies are cryptocurrencies in that they seekconsensus through means of techniques from the field of cryptography. Bitcoinusers do not have to disclose themselves, but maintain a digital wallet ontheir computers and by using a special software. A key innovation of digitalcurrency systems is the use of a distributed ledger that allows payments to bemade in a decentralized way.

Adoption of digital currency is driven by threefactors, ideology, financial return and pursuit of lower transaction fees.  Analyzing digital paymentindustry in IndiaWecan analyze and understand the future and present growth of digital payment inIndia through Porter’s Five Force Model. The Porter’s Five Force Model (1979),will reveal the industry competitors, threat of new entries, bargaining powerof customers, threat of substitute products or services and bargaining power ofsuppliers.