A central bank in a country with a well-developed digital payment ecosystem is considering issuing a CBDC. The bank's primary motivation is to ensure that the central bank retains a role in the digital payment landscape and to provide a risk-free digital asset. Which motivation is most aligned with this goal?

Facilitating cross-border remittances

Providing a central bank-backed digital alternative to private payment systems

Reducing the use of physical cash

Increasing the profitability of commercial banks

How does e-CNY differ from many other CBDC initiatives in terms of its development stage?

e-CNY is a wholesale-only CBDC, unlike other retail-focused initiatives

e-CNY is further along in pilot testing and real-world deployment than most other major CBDCs

e-CNY is the only CBDC that uses blockchain technology

e-CNY is designed exclusively for cross-border payments, unlike other CBDCs

A payment service provider in China is applying to become an authorized intermediary for e-CNY distribution. The provider needs to understand its role in the two-tier model. Which responsibility is the provider expected to perform?

Opening digital wallets, performing KYC, and facilitating customer transactions

Issuing e-CNY directly to consumers as a central bank liability

Setting the monetary policy and interest rates for e-CNY

Managing the national e-CNY ledger and validating all transactions

What is the primary difference between a retail CBDC and a wholesale CBDC?

Retail CBDCs are token-based, while wholesale CBDCs are account-based

Retail CBDCs are used for cross-border payments, while wholesale CBDCs are used for domestic payments

Retail CBDCs are issued by commercial banks, while wholesale CBDCs are issued by the central bank

Retail CBDCs are for the general public, while wholesale CBDCs are for financial institutions

What is the primary defining characteristic of a Central Bank Digital Currency (CBDC)?

A cryptocurrency issued by a private consortium and pegged to a fiat currency

A decentralized digital currency with no central authority controlling its supply

A digital token used only for interbank settlement and not accessible to the public

A digital currency issued and backed by a central bank as legal tender

EC-CouncilBlockchain Fintech Certification

Domain 6Objective 4

Central Bank Digital Currencies (CBDCs) and e-CNY BFC Practice Questions (Page 10)

Part of the Digital Currencies and Cryptocurrencies domain, which makes up ~15% of our current practice bank.

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Questions 46–50

46application · medium
A central bank in a country with a well-developed digital payment ecosystem is considering issuing a CBDC. The bank's primary motivation is to ensure that the central bank retains a role in the digital payment landscape and to provide a risk-free digital asset. Which motivation is most aligned with this goal?
Select an answer first
47foundation · easy
How does e-CNY differ from many other CBDC initiatives in terms of its development stage?
Select an answer first
48application · medium
A payment service provider in China is applying to become an authorized intermediary for e-CNY distribution. The provider needs to understand its role in the two-tier model. Which responsibility is the provider expected to perform?
Select an answer first
49foundation · easy
What is the primary difference between a retail CBDC and a wholesale CBDC?
Select an answer first
50foundation · easy
What is the primary defining characteristic of a Central Bank Digital Currency (CBDC)?
Select an answer first

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