RC: Current Affairs - 4 | 100 RCs for Practice - CAT PDF Download

Passage

Direction: The passage below is accompanied by a set of questions. Choose the best answer to each question.
The advent of digital currencies has sparked a global debate on the future of finance. Proponents argue that cryptocurrencies like Bitcoin and Ethereum represent the next evolution of money, offering decentralization, security, and efficiency. They envision a future where digital currencies facilitate faster transactions, reduce transaction costs, and provide financial services to the unbanked population.
However, skeptics raise concerns about the stability and security of digital currencies. The volatile nature of cryptocurrency markets has led to significant financial losses for uninformed investors. Furthermore, the anonymity provided by digital currencies has been exploited for illicit activities, raising regulatory concerns. Central banks and financial institutions are also apprehensive about the potential disruption to the traditional financial system and the challenges in monetary policy implementation.
The debate extends to the environmental impact of digital currencies. The energy-intensive process of mining cryptocurrencies, particularly Bitcoin, has raised alarms about their carbon footprint. This has prompted some countries to ban cryptocurrency mining and others to explore more sustainable alternatives.
As the world grapples with the implications of digital currencies, the debate continues to evolve. It is a multifaceted issue that encompasses financial innovation, regulatory challenges, and environmental considerations. The decisions made today will shape the financial landscape of tomorrow.
Q1: According to the passage, what are the potential benefits of digital currencies?
(a) Decentralization, security, and efficiency.
(b) Stability and predictability of markets.
(c) Elimination of illicit activities.
(d) Reduction in environmental impact.

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Q2: What concern is raised about the impact of digital currencies on traditional financial systems?
(a) They will enhance the efficiency of traditional systems.
(b) They will disrupt traditional systems and pose challenges for monetary policy.
(c) They will make traditional systems more accessible to the unbanked.
(d) They will lead to a decrease in transaction costs in traditional systems.

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Q3: The passage mentions that the anonymity of digital currencies has been exploited for:
(a) Reducing transaction costs.
(b) Facilitating faster transactions.
(c) Illicit activities.
(d) Providing financial services to the unbanked.

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Q4: What does the author imply by the term "multifaceted issue" in the context of the passage?
(a) An issue that is simple and straightforward.
(b) An issue that is outdated and irrelevant.
(c) An issue that has many complex and interrelated aspects.
(d) An issue that has been resolved and no longer debated.

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