CMA Final · Strategic Financial Management · Digital Finance
A crypto-linked token is not recognised as legal tender in India. Which statement about central bank digital currency (CBDC) is correct as per the standard treatment taught for Digital Finance?
CBDC is a digital form of legal tender issued by the central bank and shown as the central bank's liability. It is not a commercial bank deposit, a mined decentralised coin, or a private stablecoin.
- ACBDC is a digital form of legal tender issued by the central bank and is a liability of the central bankCorrect
- BCBDC is issued by commercial banks and backed by their deposits
- CCBDC is a decentralised token whose supply is set by mining
- DCBDC is a private stablecoin pegged to the rupee by an exchange
Explanation
CBDC is the digital form of fiat currency issued by the central bank, appearing as its liability. Commercial bank deposits, mined tokens and private stablecoins are not CBDC.
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