CBDC is backed by a central bank and subject to regulation and oversight, whereas traditional currency is physical and guaranteed by a government, while digital currency is often decentralized and unregulated. Peer-to-peer transactions can be conducted securely and anonymously using digital currency, also referred to as crypto currency. Like many other nations, India has struggled with how to control digital currency within its boundaries. Although the creation of a CBDC might completely alter India's financial system, it also poses issues with privacy and government control. It would be interesting to observe how India adopts this new type of currency as the digital currency continues to gain popularity on a global scale. India's legal framework for digital currency is still being developed, and the RBI is being cautious in how it regulates it. The framework for digital money in India, including its present state, rules, and prospective ramifications, will be examined in this research study.