Consider the following statements in respect of the digital rupee: 1. It is a sovereign currency issued by…
Consider the following statements in respect of the digital rupee: 1. It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy. 2. It appears as a liability on the RBI's balance sheet. 3. It is insured against inflation by its very design. 4. It is freely convertible against commercial bank money and cash. Which of the statements given above are correct?
1 and 2 only
1 and 3 only
2 and 4 only
1, 2 and 4
Solution
The e-rupee (CBDC) is a sovereign currency issued by RBI, appears as a liability on the RBI's balance sheet and is freely convertible 1:1 with commercial bank money and physical cash. It is NOT insured against inflation by design — like any fiat money, it loses value as prices rise.