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 digital rupee (e₹) is the Central Bank Digital Currency (CBDC) launched by the RBI. It is a sovereign currency issued by the RBI in accordance with its monetary policy — statement 1 is correct. Like physical cash, it appears as a liability on the RBI's balance sheet — statement 2 is correct. It is NOT insured against inflation by design — as a fiat currency, its real value erodes with inflation just like physical rupee notes — statement 3 is incorrect. It is freely convertible at par against commercial bank money and physical cash (1:1 convertibility), making it interchangeable with existing forms of money — statement 4 is correct. Hence 1, 2 and 4 are correct.