Central Bank Digital Currencies (CBDCs) and e-CNY BFC Practice Questions (Page 6)

Questions 26–30

1. 26foundation · easy

   Which of the following is a lesson learned from the e-CNY pilot programs?

   • AThe requirement to eliminate all physical cash to increase e-CNY usage
   • BThe need to make e-CNY interest-bearing to attract users
   • CThe importance of interoperability with existing payment systems and merchant acceptance
   • DThe necessity of using a public blockchain to ensure transparency
   Reveal Solution Discussion Select an answer first
2. 27foundation · easy

   Which of the following is a primary objective that central banks aim to achieve by issuing a CBDC?

   • AEnhancing financial inclusion by providing access to digital payments for unbanked populations
   • BProviding a speculative investment vehicle for retail investors
   • CCreating a decentralized network for peer-to-peer transactions without any oversight
   • DEliminating all forms of cash and physical currency from circulation
   Reveal Solution Discussion Select an answer first
4. 28application · medium

   A journalist is writing an article about the e-CNY and wants to accurately describe its development timeline. Which statement is correct?

   • Ae-CNY is a private cryptocurrency developed by Alibaba and WeChat
   • Be-CNY was first proposed in 2020 and immediately rolled out nationwide
   • Ce-CNY research began around 2014, with pilot programs starting in 2019–2020 in selected cities
   • De-CNY was launched nationally in 2014 and has been fully adopted by all Chinese citizens
   Reveal Solution Discussion Select an answer first
5. 29expert · hard

   A central bank is evaluating the risks and benefits of issuing a retail CBDC. One major risk is the potential for bank disintermediation, where consumers move deposits from commercial banks into the CBDC, reducing banks' ability to lend. Which design feature is most effective in mitigating this risk while still achieving the goal of providing a safe digital payment instrument?

   • AProviding unlimited CBDC holdings with no restrictions
   • BOffering a high interest rate on CBDC holdings to encourage adoption
   • CImposing a tiered remuneration structure where CBDC holdings above a certain threshold earn no interest or a negative rate
   • DMaking the CBDC fully anonymous to attract users
   Reveal Solution Discussion Select an answer first
6. 30application · easy

   A foreign bank is analyzing the e-CNY pilot to understand how the digital yuan is distributed to consumers. The bank notes that the People's Bank of China (PBOC) does not directly open wallets for individuals. Instead, commercial banks and other authorized intermediaries handle customer-facing services. Which operational model does this describe?

   • ADecentralized model where e-CNY is mined and distributed by a public blockchain network
   • BTwo-tier operational model where the PBOC issues e-CNY to authorized intermediaries, which then distribute it to the public
   • CHybrid model where the PBOC issues e-CNY directly to consumers and commercial banks only provide technical support
   • DSingle-tier model where the PBOC directly manages all retail wallets and transactions
   Reveal Solution Discussion Select an answer first