gs1medium

With reference to the Central Bank digital currencies, consider the following statements:

  1. 1.It is possible to make payments in a digital currency without using US dollar or SWIFT system.
  2. 2.A digital currency can be distributed with a condition programmed into it such as time-frame for spending it.

Which of the statements given above is/are correct?

  1. A.1 only
  2. B.2 only
  3. C.Both 1 and 2
  4. D.Neither 1 nor 2
▶ Answer & Explanation

Correct answer: C. Both 1 and 2

Central Bank Digital Currencies (CBDCs) aim to facilitate cross-border payments, potentially reducing reliance on traditional correspondent banking networks and the US dollar as the primary intermediary. Furthermore, CBDCs can incorporate programmability, allowing for the embedding of specific conditions, such as expiry dates or usage restrictions, directly into the digital currency itself.

Source: UPSC gs1 2023

Practice this question with answer tracking

Track your performance, build spaced repetition reviews, and see your weak areas.

Start practising free →