Central Bank Digital Currencies (CBDCs) and e-CNY BFC Practice Questions (Page 4)

Questions 16–20

1. 16application · medium

   A payment service provider in China wants to integrate e-CNY into its platform. The provider must comply with the e-CNY's operational model. Which of the following actions is required for the provider to participate?

   • AOperate independently without any central bank oversight
   • BIssue its own digital tokens backed by e-CNY reserves
   • CMine e-CNY by contributing computing power to a public blockchain
   • DBecome an authorized intermediary by obtaining approval from the PBOC and following the central bank's technical and business rules
   Reveal Solution Discussion Select an answer first
2. 17application · easy

   A developing country's central bank is considering issuing a retail CBDC to increase financial inclusion. The country has a large unbanked population, but mobile phone penetration is high. Which primary motivation for CBDC adoption does this scenario illustrate?

   • AReducing the cost of cross-border remittances
   • BEnhancing the effectiveness of monetary policy through negative interest rates
   • CImproving financial inclusion by providing a digital payment method that does not require a traditional bank account
   • DProtecting the central bank's seigniorage revenue from private cryptocurrencies
   Reveal Solution Discussion Select an answer first
4. 18application · medium

   A country with a highly dollarized economy is considering issuing a CBDC. The central bank's primary goal is to strengthen monetary policy transmission and reduce reliance on foreign currency. Which motivation for CBDC adoption is most directly aligned with this goal?

   • APromoting financial inclusion for unbanked citizens
   • BEnhancing cross-border payment efficiency
   • CProviding a digital alternative to physical cash
   • DReasserting monetary sovereignty and improving the central bank's ability to influence domestic interest rates
   Reveal Solution Discussion Select an answer first
5. 19application · medium

   A researcher is studying the e-CNY pilot programs and wants to identify a key lesson that has been learned from the trials. Which of the following is a documented lesson from the e-CNY pilots?

   • AThe e-CNY pilot has shown that programmability cannot be implemented in a centralized system
   • BThe two-tier model effectively leverages commercial banks' existing customer relationships and infrastructure, reducing the burden on the central bank
   • CThe e-CNY pilot has demonstrated that offline payments are impossible without a battery
   • DThe e-CNY has fully replaced cash and bank deposits in pilot cities
   Reveal Solution Discussion Select an answer first
6. 20application · medium

   A financial analyst is comparing the e-CNY with other CBDC projects, such as the European Central Bank's digital euro project. The analyst notes that the e-CNY is already in advanced pilot stages, while the digital euro is still in the investigation phase. Which factor is a key reason for this difference in progress?

   • AThe e-CNY uses a simpler technology that is easier to deploy
   • BThe e-CNY is a private initiative, while the digital euro is a public project
   • CThe digital euro has been delayed due to technical failures
   • DChina's centralized decision-making and state-backed financial infrastructure allow faster implementation, while the EU's multi-country governance requires more consensus-building
   Reveal Solution Discussion Select an answer first