Central Bank Digital Currencies (CBDCs) and e-CNY BFC Practice Questions (Page 3)

Questions 11–15

1. 11foundation · easy

   What is the e-CNY?

   • AA digital payment system operated by Alipay and WeChat Pay
   • BA cryptocurrency created by a private Chinese company, similar to Bitcoin
   • CA stablecoin pegged to the Chinese yuan and issued by a consortium of banks
   • DA digital currency issued by the People's Bank of China (PBOC) as legal tender
   Reveal Solution Discussion Select an answer first
2. 12foundation · easy

   What is a potential risk that a retail CBDC could pose to commercial banks?

   • AIt could force banks to hold more physical cash reserves
   • BIt could make commercial banks obsolete by eliminating the need for loans
   • CIt could lead to bank disintermediation if depositors shift funds into CBDC holdings
   • DIt could increase the cost of printing physical currency
   Reveal Solution Discussion Select an answer first
4. 13foundation · easy

   What is the role of e-CNY in the Chinese financial system?

   • ATo enable anonymous, unregulated transactions outside the financial system
   • BTo replace all physical cash and bank deposits in China
   • CTo compete with private payment platforms like Alipay and WeChat Pay by offering higher interest rates
   • DTo serve as a digital complement to physical cash, providing a central bank-backed payment option
   Reveal Solution Discussion Select an answer first
5. 14foundation · easy

   Which of the following is a common economic motivation for a central bank to issue a CBDC?

   • ATo maintain monetary sovereignty in the face of private digital currencies
   • BTo replace all physical cash with a digital form to reduce costs
   • CTo create a new asset class for speculative trading
   • DTo eliminate the need for commercial banks in the financial system
   Reveal Solution Discussion Select an answer first
6. 15foundation · easy

   Who are the authorized intermediaries in the second tier of the e-CNY system?

   • AForeign central banks and international monetary organizations
   • BCryptocurrency exchanges and digital asset trading platforms
   • CThe People's Bank of China's regional branches
   • DCommercial banks and other licensed payment institutions
   Reveal Solution Discussion Select an answer first