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With reference to Central Bank digital currencies, consider the following statements: 1. It is possible to make payments in a digital currency without using US dollar or SWIFT system. 2. A digital currency can be distributed with conditions programmed into it such as a time-frame for spending it. Which of the statements given above is/are correct?

UPSC · 2023 · Economy
Question:
With reference to Central Bank digital currencies, consider the following statements: 1. It is possible to make payments in a digital currency without using US dollar or SWIFT system. 2. A digital currency can be distributed with conditions programmed into it such as a time-frame for spending it. Which of the statements given above is/are correct?

Options

1 only
2 only
Both 1 and 2
Neither 1 nor 2
Answer: Both 1 and 2

Explanation:
Central Bank Digital Currencies (CBDCs) can enable direct transactions without SWIFT or dollar mediation and can incorporate programmable features like expiry or usage limits.

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