Central Bank Digital Currencies (CBDCs) and e-CNY BFC Practice Questions (Page 5)

Questions 21–25

1. 21application · medium

   A central bank is exploring a CBDC to improve the efficiency of securities settlement between financial institutions. The bank wants to minimize the impact on the general public and the existing retail payment systems. Which type of CBDC is most appropriate?

   • ARetail CBDC with offline payment features
   • BWholesale CBDC restricted to financial institutions
   • CRetail CBDC with a focus on peer-to-peer payments
   • DWholesale CBDC with full public access
   Reveal Solution Discussion Select an answer first
2. 22application · easy

   A retail merchant in China wants to accept e-CNY payments, but customers sometimes have poor internet connectivity in the area. The merchant needs a payment method that works even when the network is unavailable. Which e-CNY feature addresses this need?

   • AOffline payment capability, allowing transactions to be completed between devices without internet access
   • BProgrammability, allowing the merchant to set custom payment rules
   • CTiered anonymity, providing privacy for small transactions
   • DInteroperability with other payment systems
   Reveal Solution Discussion Select an answer first
4. 23expert · hard

   A central bank is designing a retail CBDC and wants to balance privacy with anti-money laundering (AML) requirements. The bank also wants to ensure that the CBDC can be used for small everyday payments without creating a full transaction record for every purchase. Which design approach best meets these requirements?

   • ANo anonymity, but only the central bank can see transaction data
   • BFull anonymity for all transactions, with no AML reporting
   • CFull traceability for all transactions, with no privacy protections
   • DTiered anonymity: small transactions are anonymous and not recorded, while larger transactions require identity verification and are subject to AML reporting
   Reveal Solution Discussion Select an answer first
5. 24application · medium

   A developing country's central bank is considering a CBDC to improve financial inclusion. The country has a large unbanked population and limited internet connectivity in rural areas. Which primary objective of a CBDC is most directly supported by this initiative?

   • AReplacing physical cash to reduce printing costs
   • BProviding a safe digital payment method accessible without a traditional bank account
   • CEnhancing the efficiency of interbank settlement
   • DReducing the cost of cross-border remittances
   Reveal Solution Discussion Select an answer first
6. 25foundation · easy

   In CBDC design, what is the key difference between an account-based and a token-based CBDC?

   • AAccount-based CBDCs are stored on a blockchain, while token-based CBDCs are not
   • BAccount-based CBDCs require identity verification, while token-based CBDCs rely on possession of the token
   • CAccount-based CBDCs are only for wholesale use, while token-based CBDCs are for retail use
   • DAccount-based CBDCs are interest-bearing, while token-based CBDCs are not
   Reveal Solution Discussion Select an answer first