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 condition programmed into it such as a time-frame for spending it.
Which of the statements given above is/are correct?
Explanation
Statement 1 — Correct: Central Bank Digital Currencies (CBDCs) operating on bilateral or multilateral cross-border platforms (e.g., Project mBridge) permit direct peer-to-peer sovereign foreign exchange settlements without routing through the US dollar or the traditional SWIFT messaging infrastructure.
Statement 2 — Correct: Digital currencies possess programmability, allowing smart-contract conditions to be coded directly into the digital currency tokens—such as programmatic expiration dates, designated merchant categories, or time windows for stimulus spending.
Both statements are correct.