Economics • Banking & FinanceEasy
What is the primary objective of introducing 'Central Bank Digital Currency (CBDC)', known as the e-Rupee, by the Reserve Bank of India?
A. To provide a safe, digital alternative to physical cash, reduce operational costs of currency management, and foster financial inclusion✓ Correct Answer
B. To completely replace commercial bank deposits and eliminate private sector lending
C. To peg the Indian Rupee directly to international cryptocurrencies like Bitcoin
D. To eliminate all forms of digital payments operated by third-party private entities
💡 Solution & Explanation
The Central Bank Digital Currency, or e-Rupee, was launched by the Reserve Bank of India to offer a risk-free digital alternative to physical fiat money. It aims to lower currency management expenses, improve settlement speed, and expand financial inclusion without replacing commercial bank credit. CBDCs are sovereign currency liabilities issued directly by the central bank.
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