Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies andmdash; creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments andmdash; renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project andmdash; looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer?

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Directions: Read the given passage and answer the question that follows.

With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagarde's statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of 'cryptocurrency' by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBI's stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow China's and the EU's example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.

Q. Which of the following statements align with the concepts conveyed in the passage?

a)
The RBI may consider conducting a feasibility study for creating an official digital currency.
b)
Regulating digital currency can serve as a deterrent against tax evasion.
c)
A government-issued sovereign currency would inherently offer significant trust, security, and control.
d)
All of the above.

Correct answer is option 'D'. Can you explain this answer?

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Most Upvoted Answer

Directions: Read the given passage and answer the question that follow...

The passage alludes to the fact that "Conducting a feasibility study, designing, testing, and implementing the digital currency will likely be a time-consuming process once the RBI chooses this course of action." This suggests the accuracy of statement 1.

Furthermore, it highlights that "Official digital currencies can serve a significant role in discouraging the use of cash, thereby aiding in the prevention of tax evasion," supporting the validity of statement 2.

Additionally, the passage states that "There are numerous advantages... are highly risky," substantiating the truth of statement 3.

Hence, all of the statements are true.

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Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. What is the main point conveyed in the passage?

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Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following CANNOT be inferred from the passage?

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Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. The central banks are anxious about launching a digital currency controlled by them because of

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Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. What does "nefarious" mean in the context of the passage?

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Directions: Read the following passage and answer the question.In recent times, there has been a great euphoria about investing in cryptocurrencies. For any instrument to classify as a currency, it must have the following features: One, it is a promissory note wherein the issuer is promising the bearer or the holder a value. Two, it is backed by a sovereign nation and, therefore, there is never a question of any default in executing the promise. Three, the printing of currency in either physical or digital form is always based on some tangible asset, like gold or a basket of goods. From the above, its clear that cryptocurrency can never be a currency. Can crypto then be considered an asset? An asset is something that has a tangible value. Even if its immediate utility is intangible, an asset should have some tangible benefits. The cryptocurrencies being promoted currently — bitcoin, litecoin, ethereum — are nothing but gaming points. Whenever a discussion on cryptos takes place, promoters talk of blockchain technology. This technology is just a technique to account for transactions.Many frauds like multi-marketing schemes, chit funds or deposit frauds were disguised as timeshare schemes, gold and land investments, and promised hefty returns. These pyramid schemes were carried out over a long period to evade the law. Nevertheless, fraud could still be established, the trail of funds could be traced and the perpetrators identified. Crypto promoters have taken fraud to another level with little scope of their getting caught.The recent aggressive promotion of cryptocurrencies on print and visual media would perhaps prove to be the undoing of their promoters. It is only a matter of time before financial fraud prevention enforcement agencies like the CBI and ED catch up with them. But millions may lose their hard-earned money by then.[Extracted with edits and revisions, from Opinion, The Indian Express]Q.What function does the statement An asset is something that has a tangible value serve within the passage?

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Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer?

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Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer? for CLAT 2025 is part of CLAT preparation. The Question and answers have been prepared according to the CLAT exam syllabus. Information about Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CLAT 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer?.

Solutions for Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CLAT. Download more important topics, notes, lectures and mock test series for CLAT Exam by signing up for free.

Here you can find the meaning of Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer?, a detailed solution for Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Directions: Read the given passage and answer the question that follows.With the European Central Bank expressing its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone, it is apparent that regulators can no longer shrug aside digital currencies as a passing fad, or look upon them with suspicion. ECB President Christine Lagardes statement that the Bank may be ready to launch a digital currency in two to four years, viewed along with the public consultation on CBDC initiated by the ECB, suggests that the EU is serious about launching an official digital currency to boost digital payments. China may, however, be the first in this race; work on a CBDC has already begun and the Digital Currency Electronic Payment (DCEP) is currently being pilot tested in many Chinese cities. The need for a digital currency arises from two main factors: marginalising the use of cryptocurrency by anonymous non-State actors, often for nefarious ends; and moving to cashless transactions to curb tax evasion. Indian regulators are yet to start work on developing a government-backed digital currency, though there were reports of the RBI exploring its feasibility around three years back. Other countries including the US and the UK are also treading cautiously, awaiting thorough due diligence before venturing into this space. Governments and monetary authorities are apprehensive for good reasons. The past decade has been a roller-coaster for cryptocurrencies, led by Bitcoin, with frenzied rallies, large declines and numerous scams involving money laundering, terror financing and drug trafficking. The RBI had, in 2018, directed financial institutions against facilitating transactions involving crypto currencies, leading to many crypto trading platforms shutting down. The anarchic design of crypto currencies — creation as well as maintenance in the hands of the public, with no government supervision and ease of cross-border payments — renders them vulnerable to malpractice. The RBIs stance that it is against any privately issued digital currency is unexceptionable, as these currencies are not backed by any asset. Yet, a legal digital currency is not without advantages. The RBI should follow Chinas and the EUs example to start work on a digital currency for India. The advantages are numerous. One, official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion. Two, CBDCs will be pegged to the fiat currency and hence will not witness the volatility being seen in crypto currencies. Three, official digital currencies will be legal tender with sovereign backing, thus protecting consumers. Four, it will help distract investors from the current bunch of crypto assets that are highly risky. The feasibility study, design, testing and implementation are likely to take years, once the RBI decides on this path. It would, therefore, be best to set up a committee to begin working on this project — looking into its impact on macroeconomy and liquidity, banking systems and money markets.Q. Which of the following statements align with the concepts conveyed in the passage?a)The RBI may consider conducting a feasibility study for creating an official digital currency.b)Regulating digital currency can serve as a deterrent against tax evasion.c)A government-issued sovereign currency would inherently offer significant trust, security, and control.d)All of the above.Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CLAT tests.

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