Q1. [20 marks] On Future coexistence of various categories of money as described graphically in the BIS Money Flower. Discuss the ideal nature of coexistence of Public and Private money in the future within the light of

Coexistence. Central banks have a mandate for stability and proceed cautiously in new territory. Different types of central bank money new (CBDC) and existing (cash, reserve or settlement accounts) should complement one another and coexist with robust private money to support public policy objectives. Central banks should continue providing and supporting cash for as long as there is sufficient public demand for it.

(Extract from BIS Central Bank digital currencies : foundational principles and core features)

By elaborating in details on the following aspects,

1. a) Dependent versus Independent currency.

2. b) Re-Bundling and competitive advantages and disadvantages of each category of currency (Re

   Money Flower).

3. c) Interoperability, convertibility and significance on payment system among future money.

4. d) Relationship between Digital Currency Areas (DCAs) and Public money.

5. e) Suitable environment and applications of each category of money.