Consider the following statements in respect of the digital rupee : 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 ?

The correct option is (d) because the Digital Rupee (e₹) is a Central Bank Digital Currency (CBDC) that functions as a sovereign legal tender issued by the RBI, representing a direct liability on its balance sheet and maintaining 1:1 convertibility with physical cash. Statement 3 is incorrect because, like physical currency, the digital rupee is a medium of exchange whose purchasing power is subject to market inflation and is not "insured" against it by design. The core concept tested is the functional and accounting characteristics of CBDC as a digital form of fiat money.