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Consider the following statements :
1. Unlike cryptocurrencies, central bank digital currencies are fiat currencies.
2. Digital Rupee will be accepted as a medium of payment, legal tender and a safe store of value.
3. Stablecoins are a type of cryptocurrency designed to avoid rampant volatility.
Which of the statements given above is/are correct ?
- a)1 only
- b)2 only
- c)1 and 2 only
- d)1, 2 and 3
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements :1. Unlike cryptocurrencies, central...
- Fiat currencies or money is a government-issued currency that is not backed by a physical commodity such as gold or silver but rather by the government that issued it. Cryptocurrencies are based on decentralized ledger platforms which are not governed by any centralized authority such as a central bank. As Central Bank Digital Currency (CBDC) is a digital form of currency notes issued by a central bank, it is fiat currency or money. So, Statement 1 is correct.
- The CBDC issued by RBI is referred to as e₹ (digital Rupee). The e₹ will provide an additional option to the currently available forms of money. It is substantially not different from banknotes, but being digital, it is likely to be easier, faster and cheaper. It also has all the transactional benefits of other forms of digital money. The RBI’s approach is to create a digital Rupee that is as close as possible to a paper currency and to manage the process of introducing the digital Rupee in a seamless manner. From this perspective, the e-rupee, or central bank digital currency (CBDC), will be accepted as a medium of payment, legal tender and a safe store of value akin to the paper currency currently prevalent in India. The digital Rupee (e-rupee) should not be confused with e-RUPI, which is a person-specific, even purpose-specific digital voucher-based mode of payment that helps users redeem the voucher without a card, digital payments app, or internet banking access. So, Statement 2 is correct.
- Stablecoins are a type of cryptocurrency that offers more stability than other cryptocurrencies because they are backed by real-world assets like the US Dollar, gold or another cryptocurrency. Other cryptocurrencies, such as bitcoins, are not pegged to a stable asset. Stablecoins achieve their price stability via collateralization or through algorithmic mechanisms of buying and selling the reference asset or its derivatives. So, Statement 3 is correct.
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Community Answer
Consider the following statements :1. Unlike cryptocurrencies, central...
Central Bank Digital Currencies (CBDCs)
- Statement 1 is correct. CBDCs are digital forms of a country's fiat currency, issued and regulated by the central bank.
- They are different from cryptocurrencies like Bitcoin, which are decentralized and not backed by any government.
Digital Rupee
- Statement 2 is correct. The Digital Rupee, once launched by the Reserve Bank of India, will be accepted for payments, considered legal tender, and serve as a secure store of value.
- It will function as an official form of currency in digital form, similar to physical cash.
Stablecoins
- Statement 3 is also correct. Stablecoins are a type of cryptocurrency designed to have a stable value by being pegged to a reserve asset, such as a fiat currency or commodity.
- This design aims to reduce the volatility often associated with other cryptocurrencies like Bitcoin.
Conclusion
- Therefore, all three statements are accurate in describing aspects of digital currencies, including CBDCs, the Digital Rupee, and stablecoins. Each plays a unique role in the evolving landscape of digital and virtual currencies.
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Consider the following statements :1. Unlike cryptocurrencies, central bank digital currencies are fiat currencies.2. Digital Rupee will be accepted as a medium of payment, legal tender and a safe store of value.3. Stablecoins are a type of cryptocurrency designed to avoid rampant volatility.Which of the statements given above is/are correct ?a)1 onlyb)2 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?
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Consider the following statements :1. Unlike cryptocurrencies, central bank digital currencies are fiat currencies.2. Digital Rupee will be accepted as a medium of payment, legal tender and a safe store of value.3. Stablecoins are a type of cryptocurrency designed to avoid rampant volatility.Which of the statements given above is/are correct ?a)1 onlyb)2 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements :1. Unlike cryptocurrencies, central bank digital currencies are fiat currencies.2. Digital Rupee will be accepted as a medium of payment, legal tender and a safe store of value.3. Stablecoins are a type of cryptocurrency designed to avoid rampant volatility.Which of the statements given above is/are correct ?a)1 onlyb)2 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements :1. Unlike cryptocurrencies, central bank digital currencies are fiat currencies.2. Digital Rupee will be accepted as a medium of payment, legal tender and a safe store of value.3. Stablecoins are a type of cryptocurrency designed to avoid rampant volatility.Which of the statements given above is/are correct ?a)1 onlyb)2 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?.
Consider the following statements :1. Unlike cryptocurrencies, central bank digital currencies are fiat currencies.2. Digital Rupee will be accepted as a medium of payment, legal tender and a safe store of value.3. Stablecoins are a type of cryptocurrency designed to avoid rampant volatility.Which of the statements given above is/are correct ?a)1 onlyb)2 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements :1. Unlike cryptocurrencies, central bank digital currencies are fiat currencies.2. Digital Rupee will be accepted as a medium of payment, legal tender and a safe store of value.3. Stablecoins are a type of cryptocurrency designed to avoid rampant volatility.Which of the statements given above is/are correct ?a)1 onlyb)2 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements :1. Unlike cryptocurrencies, central bank digital currencies are fiat currencies.2. Digital Rupee will be accepted as a medium of payment, legal tender and a safe store of value.3. Stablecoins are a type of cryptocurrency designed to avoid rampant volatility.Which of the statements given above is/are correct ?a)1 onlyb)2 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?.
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ample number of questions to practice Consider the following statements :1. Unlike cryptocurrencies, central bank digital currencies are fiat currencies.2. Digital Rupee will be accepted as a medium of payment, legal tender and a safe store of value.3. Stablecoins are a type of cryptocurrency designed to avoid rampant volatility.Which of the statements given above is/are correct ?a)1 onlyb)2 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice UPSC tests.
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