Role of Cryptoassets and Cryptocurrencies in Trade Finance BBLC Practice Questions (Page 1)

Questions 1–5

1. 1application · medium

   A small business owner in a developing country wants to participate in international trade but lacks access to traditional banking. They have a smartphone and internet access. Which approach best enables them to engage in cross-border trade finance?

   • AUse a peer-to-peer lending platform that requires a credit score.
   • BUse a cryptocurrency wallet to send and receive payments globally.
   • CRely on a local money transfer service that operates informally.
   • DOpen a bank account in a neighboring country with more developed banking infrastructure.
   Reveal Solution Discussion Select an answer first
2. 2expert · hard

   A company is considering using a cryptocurrency for trade settlements. The finance team is attracted by low fees and fast settlement, but the risk team is concerned about price volatility and the potential for loss due to theft or fraud. The company has a low risk tolerance. Which approach best balances these concerns?

   • AUse a stablecoin and hold it in a regulated custodial wallet with insurance.
   • BUse a volatile cryptocurrency but hedge with derivatives.
   • CUse a stablecoin but hold it in an unregulated wallet to avoid fees.
   • DUse a volatile cryptocurrency and hold it in a self-custody wallet.
   Reveal Solution Discussion Select an answer first
4. 3foundation · easy

   Which type of cryptoasset is designed to maintain a stable value by pegging to a reserve asset such as a fiat currency?

   • APayment token
   • BSecurity token
   • CStablecoin
   • DUtility token
   Reveal Solution Discussion Select an answer first
5. 4foundation · easy

   What is the primary function of a security token in the context of cryptoassets?

   • ATo serve as a medium of exchange for everyday transactions.
   • BTo represent ownership or an economic interest in an underlying asset, such as equity or debt, and is subject to securities regulations.
   • CTo provide access to a specific product or service within a platform.
   • DTo maintain a stable value by being pegged to a fiat currency.
   Reveal Solution Discussion Select an answer first
6. 5foundation · easy

   In trade finance, how can cryptocurrencies reduce transaction costs compared to traditional payment methods?

   • ABy removing intermediaries such as correspondent banks, which typically charge fees for cross-border transfers.
   • BBy being exempt from all taxes and duties in international trade.
   • CBy requiring no energy consumption for transaction validation.
   • DBy automatically converting to fiat currency at the time of transaction, avoiding exchange rate fees.
   Reveal Solution Discussion Select an answer first