With reference to Central Bank Digital Currencies

Solution

CBDCs are a digital form of a paper currency and unlike cryptocurrencies that operate in a regulatory vacuum, these are legal tenders issued and backed by a central bank. •It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency. •A fiat currency is a national currency that is not pegged to the price of a commodity such as gold or silver. •Bahamas has been the first economy to launch its nationwide CBDC — Sand Dollar in 2020. •Nigeria is another country to have rolled out e-Naira in 2020. •China became the world's first major economy to pilot a digital currency e-CNY in April 2020.