← All questionsGS3 · 2026 · Economy & Infrastructure ·Digital Rupee / CBDC
QUESTION 1
GS3
10 marks

What do you mean by Digital Rupee? In this context, explain the working and progress of India’s Central Bank Digital Currency (CBDC).

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7 min
150 words
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What the examiner wants

Define the Digital Rupee as central-bank money in digital form, explain its architecture, and summarize verified implementation progress.

ExplainMake clear how and why it happens: causes, process, and an example for each point.

Demand-wise check

  1. 1Distinguish CBDC from bank deposits, UPI/payment rails and private crypto-assets≈35 words
  2. 2Explain issuance/distribution and the retail/wholesale transaction model≈35 words
  3. 3Summarize verified pilot/progress indicators and use cases≈35 words

Open in about 20 words and close in about 20.

Answer plan

Definition/distinctionWorking architectureIndia pilot/progressSignificance/challenges

Where marks usually go

  • Calling UPI the Digital Rupee
  • Using outdated pilot numbers or claims without verification

Value addition

  • RBI → intermediary/wallet → user transaction flow
    → Draw it in the body, next to the point it supports.

Official source anchors

These are authoritative sources selected for this exact PYQ. Where a card is an official-domain anchor rather than a fact-level citation, verify the precise provision, definition or data point on the linked source before using it.