Central Bank Digital Currencies (CBDCs) and e-CNY BFC Practice Questions (Page 7)

Questions 31–35

1. 31application · medium

   A local government in China is using e-CNY to distribute targeted consumption subsidies to low-income residents. The government wants to ensure the funds are spent only on approved categories such as groceries and cannot be transferred to other individuals. Which e-CNY feature enables this requirement?

   • AInteroperability with other payment systems
   • BProgrammability, allowing the e-CNY to be embedded with smart contracts that restrict usage to specific merchants or categories
   • CAnonymity features that hide transaction details from the government
   • DOffline payment capability, allowing transactions without internet access
   Reveal Solution Discussion Select an answer first
2. 32expert · hard

   A global financial regulator is assessing the potential of e-CNY to become a dominant international payment currency. The regulator is comparing e-CNY with other CBDC projects and traditional cross-border payment systems. Which factor is most critical in determining whether e-CNY can achieve significant international adoption?

   • AThe number of pilot cities in China
   • BThe technical superiority of e-CNY's offline payment feature
   • CThe programmability of e-CNY for government subsidies
   • DThe willingness of other countries to accept e-CNY in trade and the depth of China's financial markets
   Reveal Solution Discussion Select an answer first
4. 33expert · hard

   A multinational corporation is evaluating the implications of the e-CNY for its cross-border trade with China. The company is concerned about the potential for the e-CNY to reduce its reliance on the US dollar and about the impact on international monetary systems. Which of the following is a realistic implication of the e-CNY's global adoption?

   • AThe e-CNY will immediately replace the US dollar as the world's reserve currency
   • BThe e-CNY will be pegged to a basket of currencies to facilitate international trade
   • CThe e-CNY could facilitate cross-border payments in yuan, potentially reducing the dominance of the US dollar in international trade, but its impact is limited by capital controls and the need for international cooperation
   • DThe e-CNY has no implications for international monetary systems because it is only used domestically
   Reveal Solution Discussion Select an answer first
5. 34application · medium

   A fintech consultant is analyzing the results of China's e-CNY pilot programs in cities like Shenzhen and Suzhou. The pilots tested the currency in retail payments, public transportation, and government salary distribution. Which lesson is most consistently reported from these pilots?

   • AThe pilots demonstrated that e-CNY can function without any supporting infrastructure
   • BThe pilots revealed that user adoption was driven primarily by incentives and that usage declined when incentives ended
   • CThe pilots proved that e-CNY is fully anonymous and untraceable
   • De-CNY fully replaced existing mobile payment platforms like Alipay and WeChat Pay
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6. 35application · medium

   A central bank is evaluating a CBDC design to reduce settlement risk in interbank securities transactions. The bank wants to minimize disruption to the existing two-tier banking system while improving efficiency for financial institutions. Which CBDC approach best meets these requirements?

   • AA retail CBDC with interest-bearing features to encourage savings
   • BA wholesale CBDC that replaces commercial bank reserves entirely
   • CA retail CBDC with token-based access and zero interest
   • DA wholesale CBDC restricted to financial institutions for interbank settlements
   Reveal Solution Discussion Select an answer first