Based on the search results, the digital rupee is indeed a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy, making statement 1 correct. It appears as a liability on the RBI's balance sheet, confirming statement 2 as correct. However, statement 3 is incorrect because the digital rupee is not insured against inflation; like physical cash, its purchasing power can diminish with rising inflation. Statement 4 is correct as the digital rupee is freely convertible against commercial bank money and cash. Therefore, the correct statements are 1, 2, and 4, making option 4 the correct choice.