The Reserve Bank Of India(RBI) has released a concept note on the CBDC. It is a digital form of currency notes issued by the central bank. Both the C in the acronym stands for _______ and __________respectively.

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IBPS PO Mains Memory Based Paper (Held on:26th November 2022)
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  1. Currency, Central
  2. Central, Credit
  3. Credit, Central
  4. Credit, Currency
  5. Central, Currency

Answer (Detailed Solution Below)

Option 5 : Central, Currency
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The correct answer is Central, Currency.

Key Points

  •  Digital rupee (e₹), also known as Central Bank Digital Currency (CBDC), is a digital form of currency notes issued by the central bank, Reserve Bank of India.
  • Union Finance Minister Nirmala Sitharaman had earlier announced that the RBI will launch a CBDC in 2022-23, which is the first official statement from the Union government on the much-anticipated digital currency's launch.
  • CBDC:
    • Central bank digital currencies are digital tokens, similar to cryptocurrency, issued by a central bank.
    • They are pegged to the value of that country’s fiat currency.
    • Many countries are developing CBDCs, and some have even implemented them.
    • Because so many countries are researching ways to transition to digital currencies, it’s important to understand what they are and what they mean for society.
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