Q. Consider the following statements:
1.Central Bank Digital Currency (CBDC) can be implemented without blockchain technology.
2.Central Bank Digital Currency (CBDC) are decentralized while cryptocurrencies are centralized.
Which of the statement(s) given above is/are correct?
Answer: A
Notes:
Explanation –
Statement 1 is correct. CBDCs can be implemented without relying on blockchain technology. While blockchain offers benefits such as improved security and functionality, it is not a mandatory requirement for CBDC implementation. Central banks can choose alternative technological solutions that do not involve blockchain.
Statement 2 is incorrect. CBDCs are centralized digital currencies issued and regulated by central banks, meaning they operate under government control and within the existing financial system. In contrast, cryptocurrencies like Bitcoin and Ethereum are decentralized, operating on networks that are not controlled by any central authority.
Source: AIR
