Central Bank Digital Currencies (CBDCs) and e-CNY BFC Practice Questions (Page 9)

Questions 41–45

1. 41application · medium

   A central bank is designing a retail CBDC and wants to ensure that the currency can be used by individuals who do not have a bank account. The bank also wants to maintain a record of transactions for AML purposes. Which design choice best supports both requirements?

   • AToken-based CBDC with no central record of transactions
   • BAccount-based CBDC with tiered KYC, where low-value wallets require minimal identity verification and higher-value wallets require full KYC
   • CToken-based CBDC with full anonymity and no KYC
   • DAccount-based CBDC that requires a full bank account to use
   Reveal Solution Discussion Select an answer first
2. 42expert · medium

   An international economist is comparing the e-CNY with other CBDC initiatives, such as the Bahamas' Sand Dollar and Nigeria's eNaira. The economist notes that e-CNY is often described as having a more advanced technical architecture and broader pilot scope. Which factor most directly explains this difference?

   • AThe e-CNY is the only CBDC that supports offline payments
   • BChina's large population and vast geographic area provide a larger-scale testing environment, and the PBOC has substantial financial and technical resources to invest in the project
   • CThe e-CNY is the only CBDC that is not based on blockchain technology
   • DThe e-CNY is the only CBDC that uses a two-tier operational model
   Reveal Solution Discussion Select an answer first
4. 43foundation · easy

   What is a potential implication of e-CNY for the international monetary system?

   • AIt would make cross-border payments slower and more expensive
   • BIt would force all countries to adopt the yuan as their official currency
   • CIt would eliminate the need for foreign exchange markets
   • DIt could challenge the dominance of the US dollar in international trade if widely adopted for cross-border payments
   Reveal Solution Discussion Select an answer first
5. 44application · medium

   A local government in China is planning to distribute targeted consumption subsidies to low-income residents using e-CNY. The subsidies must be spent only on approved categories (e.g., groceries, not luxury goods) and must expire after 90 days. Which e-CNY feature is most suited to enforce these requirements?

   • AProgrammability of the digital currency
   • BAnonymity for small-value transactions
   • COffline payment capability
   • DPeer-to-peer transfer functionality
   Reveal Solution Discussion Select an answer first
6. 45foundation · easy

   What was a primary purpose of the e-CNY pilot programs in various Chinese cities?

   • ATo create a decentralized network for e-CNY transactions
   • BTo test the technical performance and user acceptance of the digital currency in real-world settings
   • CTo determine the optimal interest rate for e-CNY deposits
   • DTo replace the existing payment systems like Alipay and WeChat Pay immediately
   Reveal Solution Discussion Select an answer first