Digital Rupee (CBDC)
Question
Consider the following statements in respect of the digital rupee: Which of the statements given above are correct?
- 1.
It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy.
- 2.
It appears as a liability on the RBI's balance sheet.
- 3.
It is insured against inflation by its very design.
- 4.
It is freely convertible against commercial bank money and cash.
Options
1 and 2 only
1 and 3 only
2 and 4 only
1, 2 and 4
Explanation
Statements 1, 2, and 4 are correct. The digital rupee (e₹) is a Central Bank Digital Currency (CBDC), meaning it is sovereign fiat, recorded as a liability on the RBI's balance sheet, and is freely convertible with physical cash 1:1. Statement 3 is incorrect; because it is fiat currency, its purchasing power decreases with inflation just like paper money.
Answer: (d).
Question details
Year
2024
Paper
GS Paper 1
Question
Q53
Subject
Economy
Sub-topic
Economy & Finance in News
Type
Statement-based
Difficulty
Medium
Nature
Current-affairs-linked
Source hint
RBI Digital Rupee e-Rupee Pilot Launch 2022-23
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