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UPSC Prelims 2023 Paper-1 📅 28 May, 2023

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?

A
1 only
B
2 only
C
Both 1 and 2
D
Neither 1 nor 2
Result Summary
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UPSC Prelims
2023 • 28 May, 2023 • Paper-1
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?
Correct Answer
Both 1 and 2
Subject: Economy.Context: Future of Banking and CBDCs.Details: Statement 1 is correct; Central Bank Digital Currencies (CBDCs) enable direct, sovereign-backed c......
Ref/Book : UPSC Prelims 2023
Ref. Subject Economy
Chapter -
Ref. Topic Digital Economy
Pg. No -
💡 Analysis & Explanation
Subject ▼
Economy.
Context ▼
Future of Banking and CBDCs.
Details ▼
Statement 1 is correct; Central Bank Digital Currencies (CBDCs) enable direct, sovereign-backed cross-border transactions, potentially bypassing the SWIFT messaging network and reducing reliance on the US Dollar. Statement 2 is correct; a key feature of digital currencies is 'programmability', meaning smart contracts can be embedded to restrict its use to specific purposes or within specific time frames.
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