Evolution and Role of Digital Currencies in Finance BFC Practice Questions (Page 9)

Questions 41–43

1. 41application · medium

   A central bank is researching the design of a CBDC. The bank's primary goals are financial inclusion and reducing the cost of cash handling. Which design choice best aligns with these goals?

   • AAn account-based CBDC that requires a bank account to hold and transfer
   • BA CBDC that pays interest to encourage saving
   • CA wholesale CBDC available only to commercial banks
   • DA token-based CBDC that can be stored on low-cost mobile devices and used offline
   Reveal Solution Discussion Select an answer first
2. 42application · medium

   A retailer in a country with high inflation is considering accepting a digital currency. The retailer needs a currency that can function as a reliable store of value between the time of sale and the time of paying suppliers. Which characteristic should the retailer prioritize?

   • AA stable exchange rate relative to a major fiat currency or a low-inflation basket
   • BA high transaction throughput measured in transactions per second
   • CA low transaction fee per transfer
   • DA large and active community of developers
   Reveal Solution Discussion Select an answer first
3. 43foundation · easy

   What was a primary goal of early digital cash systems like e-cash, which later influenced the design of cryptocurrencies?

   • ATo replace all physical cash with a centralized digital ledger maintained by governments.
   • BTo create a global currency controlled by a single international bank.
   • CTo enable private, electronic transactions without a central authority.
   • DTo provide a digital token backed by gold reserves.
   Reveal Solution Discussion Select an answer first