With respect to the central bank digital currency, consider the following statements:

It is a legal tender same as a fiat currency.

It would appear as a liability on a central bank’s balance sheet.

Which of the statements given above is/are correct?

Question

CBDC or e-rupee is the legal tender issued by a central bank in digital form. This means, it is the same as a fiat currency and is exchangeable one-to-one with the fiat currency, but different in its form.
The RBI has often expressed worries about private cryptocurrencies (Bitcoin, Ether) being used for money laundering, terror financing, and tax evasion.
The introduction of its own CBDC has been viewed as a means of bridging the benefits and risks of digital currency.
EIt can be accepted as a medium of payment, legal tender and a safe store of value. The digital rupee would appear as a liability on a central bank’s balance sheet.

GKToday Admin · Accepted Answer

Both 1 & 2

CBDC or e-rupee is the legal tender issued by a central bank in digital form. This means, it is the same as a fiat currency and is exchangeable one-to-one with the fiat currency, but different in its form.
The RBI has often expressed worries about private cryptocurrencies (Bitcoin, Ether) being used for money laundering, terror financing, and tax evasion.
The introduction of its own CBDC has been viewed as a means of bridging the benefits and risks of digital currency.
EIt can be accepted as a medium of payment, legal tender and a safe store of value. The digital rupee would appear as a liability on a central bank’s balance sheet.

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