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Topic: , basics of cyber security
7. Ensuring high standards of cybersecurity is essential for any country dealing with Central Bank Digital Currency. Justify. (250 words)
Reference: The Week
Why the question:
The article explains the Opportunities, Risk and Disruptions associated with Central Bank Digital Currency.
Key Demand of the question:
Discuss the importance of high standards of cybersecurity in dealing with Central Bank Digital Currency.
Directive:
Justify – When you are asked to justify, you have to pass a sound judgement about the truth of the given statement in the question or the topic based on evidences. You have to appraise the worth of the statement in question using suitable case studies or/ and examples.
Structure of the answer:
Introduction:
The broader adoption of general-purpose central bank digital currencies (CBDCs) will present authorities with trade-offs between the associated risks and benefits.
Body:
The key benefits of retail CBDCs lie in their potential to enhance authority-backed cashless payments with innovations in step with the wider digitalization of society.
For central banks in some emerging markets, a key driver for researching CBDCs is the opportunity to bring under banked communities into the financial system, and improve the cost, speed and resilience of payments.
Some advocates see CBDCs as a way of addressing challenges presented by the declining use of cash. The rise of digital payment systems, which have strong network effects, can create oligopolies among payment-system providers, often from the private sector.
Discuss how above mentioned aspects demand high standards of cyber security.
Conclusion:
Conclude with importance.
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