economics medium MCQ

The Central Bank Digital Currency (CBDC) being piloted by the RBI, known as the e-Rupee, is legally classified as:

  1. A decentralized cryptocurrency similar to Bitcoin
  2. A sovereign fiat currency and legal tender, exactly equivalent to physical cash
  3. A private stablecoin pegged to the US Dollar
  4. An electronic voucher that expires if not used within a year

Answer: A sovereign fiat currency and legal tender, exactly equivalent to physical cash

The e-Rupee (e₹) is a digital token issued by the RBI that represents legal tender. It holds the exact same value as physical paper currency and can be exchanged one-to-one with fiat money. Unlike volatile, decentralized cryptocurrencies, the CBDC is centralized, risk-free, and aims to reduce the massive costs associated with printing, storing, and transporting physical cash.

Topic Banking - Digital Currency
Exam Relevance UPSC Prelims, Banking, SSC
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