Cryptoasset Anti-Financial Crime Specialist (CCAS) Certification Practice Test

Which financial institution or organization would bear the liability of offering sovereign cryptocurrencies to the public?

1. Commercial bank

2. Decentralized autonomous organization

3. Cryptoasset exchange

4. Central bank

The correct answer is: Central bank

The central bank would bear the liability for offering sovereign cryptocurrencies to the public because it is the government authority responsible for issuing and regulating the national currency. Central banks have the mandate to ensure monetary stability and control the money supply within the economy, which includes the issuance of digital currencies that are state-backed. By offering a sovereign cryptocurrency, a central bank would assume legal responsibility and accountability for maintaining the value and integrity of that currency. This accountability represents a significant aspect of trust that citizens place in their national currency, reinforcing the central bank's role as a stabilizing force in the economy. In contrast, other institutions such as commercial banks, decentralized autonomous organizations, and cryptoasset exchanges do not have the same level of obligation or regulatory framework governing the issuance of currency. Commercial banks primarily facilitate transactions and provide banking services but do not issue national currency. Decentralized autonomous organizations operate on smart contracts without centralized authority and typically manage assets rather than issuing currency. Cryptoasset exchanges act as platforms for trading different cryptocurrencies and are not responsible for the issuance of sovereign currencies. Therefore, when discussing sovereign cryptocurrencies, the central bank's role is crucial, as it embodies the official framework for currency issuance and regulation within a sovereign nation.