Q.3 What is a Central Bank Digital Currency (CBDC)? What are its advantages and what are the concerns associated? (10 Marks)

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3 responses to “Q.3 What is a Central Bank Digital Currency (CBDC)? What are its advantages and what are the concerns associated? (10 Marks)”

  1. Alankrit Srivastava Avatar
    Alankrit Srivastava

    Payment ID : #0000645504
    Staff @CD

    1. Staff @CD Avatar
      Staff @CD

      Alankrit

      Good attempt.
      Introduction is good, some examples can be mentioned, you can link it with the recent indication by Reserve Bank of India that it will soon commence pilot launches of e-rupee for specific use cases.
      Advantages mentioned are fine. Environmental angle can be added as paper use can get discouraged.
      In concerns, some important ones are missing, for example, disintermediation of commercial banks can be triggered as people may move their money from bank accounts into CBDC – could start a vicious cycle as banks raise deposit rates to attract more money- less money with banks- less bank credit extended at higher interest rates.
      Bank runs can also be triggered as people will be able to easily take money out from banks resulting in flight of capital. Other points are also good.
      Conclusion is fine.
      Keep practicing. 🙂

      4.5/10

  2. Shubham Chate Avatar
    Shubham Chate

    KPfn46R1gsfT12 -My Razorpay ID

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