A remittance company wants to use a digital currency to reduce the cost of cross-border transfers. The company must ensure that the currency's value remains stable relative to the fiat currencies it handles, and it must comply with anti-money laundering (AML) regulations in every jurisdiction where it operates. Which type of digital currency should the company choose?

An algorithmic stablecoin that uses supply adjustments to maintain its peg

A central bank digital currency issued by a foreign central bank

A decentralized cryptocurrency with a fixed supply and no central issuer

A fiat-collateralized stablecoin issued by a regulated financial institution

Which regulatory framework is specifically designed to combat money laundering and terrorist financing in the context of digital currencies?

International Financial Reporting Standards (IFRS)

Payment Card Industry Data Security Standard (PCI DSS)

Financial Action Task Force (FATF) Recommendations

General Data Protection Regulation (GDPR)

An e-commerce platform wants to accept a digital currency that can serve as a unit of account for pricing its products. The platform operates in multiple countries and needs to avoid exchange-rate risk. Which approach should the platform take?

Price all products in a single volatile cryptocurrency and adjust prices daily

Use a digital currency that is not pegged to any fiat currency

Price products in a stablecoin that is pegged to the local fiat currency of each market

Set prices in the digital currency and convert to fiat only at checkout

A global fintech company wants to launch a digital currency payment service that operates in multiple jurisdictions. The company must comply with differing regulations, including the EU's MiCA, the US state-based licensing, and Asia's varying approaches. Which strategy is most effective for managing this regulatory complexity?

Use a decentralized autonomous organization (DAO) to avoid regulatory oversight

Adopt the strictest regulatory standard globally and apply it everywhere

Launch only in jurisdictions with the most favorable regulations

Develop a compliance framework that is modular and can be adapted to each jurisdiction's requirements

A technology historian is writing a report on the evolution of digital currencies. The historian wants to highlight a key difference between early digital cash systems and modern cryptocurrencies. Which difference should the historian emphasize?

Early digital cash was anonymous, while modern cryptocurrencies are always traceable

Early digital cash was backed by gold, while modern cryptocurrencies are backed by fiat

Early digital cash relied on a central authority, while modern cryptocurrencies use decentralized consensus

Early digital cash used paper certificates, while modern cryptocurrencies are purely electronic

EC-CouncilBlockchain Fintech Certification

Domain 6Objective 1

Evolution and Role of Digital Currencies in Finance BFC Practice Questions (Page 8)

Part of the Digital Currencies and Cryptocurrencies domain, which makes up ~15% of our current practice bank.

43questions here

9free pages

4concepts

Questions 36–40

36application · medium
A remittance company wants to use a digital currency to reduce the cost of cross-border transfers. The company must ensure that the currency's value remains stable relative to the fiat currencies it handles, and it must comply with anti-money laundering (AML) regulations in every jurisdiction where it operates. Which type of digital currency should the company choose?
Select an answer first
37foundation · easy
Which regulatory framework is specifically designed to combat money laundering and terrorist financing in the context of digital currencies?
Select an answer first
38application · medium
An e-commerce platform wants to accept a digital currency that can serve as a unit of account for pricing its products. The platform operates in multiple countries and needs to avoid exchange-rate risk. Which approach should the platform take?
Select an answer first
39expert · hard
A global fintech company wants to launch a digital currency payment service that operates in multiple jurisdictions. The company must comply with differing regulations, including the EU's MiCA, the US state-based licensing, and Asia's varying approaches. Which strategy is most effective for managing this regulatory complexity?
Select an answer first
40application · medium
A technology historian is writing a report on the evolution of digital currencies. The historian wants to highlight a key difference between early digital cash systems and modern cryptocurrencies. Which difference should the historian emphasize?
Select an answer first

Finished these 5 questions?

Review the revealed explanations, or continue through the curriculum.

Next 5 questions →Back to BFC

Free Basic Practice is a study aid with revealable answers — not a scored exam. Examers.io is independent and not affiliated with or endorsed by EC-Council. “BFC” is a trademark of its owner, used for identification only.

Evolution and Role of Digital Currencies in Finance BFC Practice Questions (Page 8)

Questions 36–40

Which regulatory framework is specifically designed to combat money laundering and terrorist financing in the context of digital currencies?

An e-commerce platform wants to accept a digital currency that can serve as a unit of account for pricing its products. The platform operates in multiple countries and needs to avoid exchange-rate risk. Which approach should the platform take?

A technology historian is writing a report on the evolution of digital currencies. The historian wants to highlight a key difference between early digital cash systems and modern cryptocurrencies. Which difference should the historian emphasize?

Keep studying — Digital Currencies and Cryptocurrencies