Q. 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?
Exp) Option d is the correct answer.
Statement 1 is correct: Reserve Bank defines Central Bank Digital Currency (CBDC), e₹, (Digital Rupee) as the legal tender issued by a central bank in a digital form. CBDC is sovereign currency issued by Central Banks in alignment with their monetary policy.
Statement 2 is correct: Digital Rupee appears as a liability on the central bank’s balance sheet.
Statement 3 is incorrect: Digital Rupee is considered a safe store of value but not insured against inflation. Like physical cash, the purchasing power of the digital rupee diminishes with rising inflation.
Statement 4 is correct: Digital Rupee are freely convertible against commercial bank money and cash.
Source: https://rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=1218#CP1
