CBSE 2023 · Region 4 · Set 1 · Q15

Read the following text carefully :

"After setting up a working group to study the possibility of a Central Bank Digital Currency (CBDC) in India in $\displaystyle 2020$, the RBI revealed a concept note on digital rupee (e-Rupee) on 7th October, 2022."

"The e-Rupee will provide an additional option to the currency available forms of money. It is substantially not different from bank notes, but being digital it is likely to be easier, faster and cheaper."

RBI said that it broadly defines CBDC as the legal tender issued by a central bank in a digital form. It is akin to paper currency in a different form.

On the basis of the above text and common understanding, answer the following questions :

(a)

Identify and discuss the function of central bank indicated in the above text.

(b)

State any two advantages of digital rupee.