With reference to Central Bank digital currencies, consider the following statements :
- 1.It is possible to make payments in a digital currency without using US dollar or SWIFT system.
- 2.A digital currency can be distributed with a condition programmed into it such as a time-frame for spending it.
Which of the statements given above is/are correct?
Show answer
Answer: C. Statement 1 is correct: countries can settle payments in their own digital currencies directly, without the US dollar or the SWIFT network. Statement 2 is correct: a CBDC can be programmed, for example to expire if not spent within a set time or to be used only for certain purposes. So both.
Watch for: Programmable money sounds futuristic, but it is a well-discussed CBDC feature.
Why the other options are wrong
- A. Wrong because programmable conditions are possible too.
- B. Wrong because payments without the dollar or SWIFT are possible.
- D. Wrong because both features are possible.
Source to check: RBI Concept Note on Central Bank Digital Currency, October 2022 (rbi.org.in)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.