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With reference to the cryptocurrencies, consider the following statements:
1. Investors don't earn interest on their holdings of cryptocurrencies, however they can borrow using it as collateral to back a loan.
2. Stablecoins are cryptocurrencies pegged to stable assets and are meant to provide the steady value of government-issued money in digital form.
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
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
With reference to the cryptocurrencies, consider the following stateme...
  • A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.
    • Lending and borrowing are alternative services offered by cryptocurrencies.
  • Investors can earn interest on their holdings of digital currencies - often a lot more than they could on cash deposits in a bank - or borrow with crypto as collateral to back a loan. Hence statement 1 is not correct.
    • By law, banks are required to have reserves to ensure that even if some loans go bad, customers can still withdraw funds, whereas crypto banks do not have the same reserve requirements and the institutions they lend to can take risky activities.
  • Deposits are not guaranteed by the central bank’s backed Deposit Insurance Corp. Cyberattacks, extreme market conditions, or other operational or technical difficulties could lead to a temporary or permanent halt on withdrawals or transfers.
  • Stablecoin are cryptocurrencies pegged to stable assets, commonly the dollar. They are meant to provide the steady value of government-issued money in digital form for blockchain transactions, but they are issued by private entities. Hence statement 2 is correct.
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With reference to the cryptocurrencies, consider the following statements:1. Investors dont earn interest on their holdings of cryptocurrencies, however they can borrow using it as collateral to back a loan.2. Stablecoins are cryptocurrencies pegged to stable assets and are meant to provide the steady value of government-issued money in digital form.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer?
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With reference to the cryptocurrencies, consider the following statements:1. Investors dont earn interest on their holdings of cryptocurrencies, however they can borrow using it as collateral to back a loan.2. Stablecoins are cryptocurrencies pegged to stable assets and are meant to provide the steady value of government-issued money in digital form.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about With reference to the cryptocurrencies, consider the following statements:1. Investors dont earn interest on their holdings of cryptocurrencies, however they can borrow using it as collateral to back a loan.2. Stablecoins are cryptocurrencies pegged to stable assets and are meant to provide the steady value of government-issued money in digital form.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the cryptocurrencies, consider the following statements:1. Investors dont earn interest on their holdings of cryptocurrencies, however they can borrow using it as collateral to back a loan.2. Stablecoins are cryptocurrencies pegged to stable assets and are meant to provide the steady value of government-issued money in digital form.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer?.
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