1. It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy.
2. It appears as a liability on the RBI’s balance sheet.
3. It is insured against inflation by its very design.
4. It is freely convertible against commercial bank money and cash.
Which of the statements given above are correct?
(a). 1 and 2 only
(b). 1 and 3 only
(c). 2 and 4 only
(d). 1, 2 and 4
Explanation:
Statement 1 is correct: The digital rupee is indeed a sovereign currency issued by the RBI in alignment with its monetary policy.
Statement 2 is also correct: Like any other form of currency, the digital rupee appears as a liability on the RBI's balance sheet.
Statement 3 is incorrect: No currency, digital or physical, is inherently insured against inflation. Inflation is a broader economic phenomenon that affects all forms of currency.
Statement 4 is also incorrect: While the digital rupee is intended to be freely convertible, complete convertibility against commercial bank money and cash is a complex issue and might not be fully implemented initially.
Therefore, the correct answer is option (a).