Consider the following statements in respect of the digital rupee :
- 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.
Which of the statements given above are correct ?
Show answer
Answer: D. Statement 1 is correct: the digital rupee (e-rupee) is a sovereign currency issued by RBI, in line with its monetary policy. Statement 2 is correct: like cash, it is a liability on RBI's balance sheet. Statement 3 is wrong: it is not protected from inflation; it loses value just like cash. Statement 4 is correct: it can be exchanged one-to-one for bank money and cash. So 1, 2 and 4.
Watch for: Being 'digital' and from RBI sounds extra safe, but the e-rupee carries the same inflation risk as cash.
Why the other options are wrong
- A. Wrong because Statement 4 is also correct.
- B. Wrong because Statement 3 is false.
- C. Wrong because Statement 1 is also correct.
Source to check: RBI, 'Concept Note on Central Bank Digital Currency' (October 2022)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.