Prelims 2024 · Economy · Question 33
Consider the following statements in respect of the digital rupee:
- It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy.
- It appears as a liability on the RBI's balance sheet.
- It is insured against inflation by its very design.
- It is freely convertible against commercial bank money and cash.
Which of the statements given above are correct?
Answer
1, 2 and 4
1. Correct. Digital rupee (CBDC/e₹) is a sovereign currency issued by the RBI and is designed to be consistent with monetary policy.
2. Correct. Like physical currency, CBDC is a liability on the RBI’s balance sheet.
3. Incorrect. It is not inherently protected against inflation; its value depends on the same macroeconomic conditions as the rupee.
4. Correct. RBI states CBDC is freely convertible into cash and commercial bank money.
Therefore, statements 1, 2 and 4 are correct.