Role of Cryptoassets and Cryptocurrencies in Trade Finance BBLC Practice Questions (Page 9)

Questions 41–45

1. 41foundation · easy

   Which of the following is a key advantage of using cryptocurrencies for cross-border payments in trade finance?

   • AThey eliminate all regulatory requirements for international trade.
   • BThey enable near-instant settlement without the need for intermediary banks, reducing transaction time and cost.
   • CThey are accepted universally by all governments as legal tender.
   • DThey are always backed by central banks, ensuring a stable exchange rate.
   Reveal Solution Discussion Select an answer first
2. 42expert · hard

   A company is planning to issue a token to raise funds for a new trade finance platform. The token will provide holders with a share of the platform's profits. Which type of token should the company issue, and what is the primary regulatory implication?

   • AA utility token, which will not be subject to securities regulations.
   • BA security token, which will be subject to securities regulations.
   • CA stablecoin, which will be treated as a commodity.
   • DA payment token, which will be treated as a currency.
   Reveal Solution Discussion Select an answer first
4. 43expert · hard · select all that apply

   A multinational corporation is considering using a cryptocurrency for supplier payments. The treasury team is concerned about volatility, while the compliance team is concerned about AML/KYC regulations. Which of the following measures would help mitigate these concerns? Select all that apply.

   • AUse a stablecoin to reduce price volatility.
   • BImmediately convert the cryptocurrency to fiat upon receipt to lock in value.
   • CUse a privacy coin to hide transaction details from regulators.
   • DUse a regulated exchange that performs KYC on all parties.
   Check answers Discussion Select an answer first
5. 44foundation · easy

   Which statement best distinguishes a cryptocurrency from a broader cryptoasset?

   • ACryptocurrencies are only used for investment, while cryptoassets are used exclusively for payments and transfers.
   • BA cryptocurrency is a type of cryptoasset designed primarily to function as a medium of exchange, while cryptoassets include a wider range of digital assets with various purposes.
   • CCryptocurrencies are issued by central banks, while cryptoassets are issued by private companies and are not regulated.
   • DA cryptocurrency is any digital asset that derives its value from an underlying physical commodity, while cryptoassets are purely digital and have no intrinsic value.
   Reveal Solution Discussion Select an answer first
6. 45expert · hard

   A cross-border trading company is considering switching from letters of credit to a blockchain-based payment system using a cryptocurrency. The company's CFO is attracted by lower fees and faster settlement, but the legal team warns that the cryptocurrency's legal status is unclear in several countries where the company operates. The company also relies on its bank for working capital loans. Which decision best addresses the legal uncertainty while preserving the benefits of blockchain?

   • AUse a cryptocurrency that is banned in some countries but offers the lowest transaction fees.
   • BUse a permissioned blockchain with a fiat-backed stablecoin issued by a regulated financial institution, and maintain the letter of credit for jurisdictions with unclear crypto laws.
   • CUse a decentralized cryptocurrency and rely on smart contracts to enforce payment obligations without legal intervention.
   • DContinue using letters of credit for all transactions to avoid any legal risk.
   Reveal Solution Discussion Select an answer first