Name: B.Geethpriya & Thasmina
Country: India

Year: 2026
Volume: Volume-11, Issue-1, January-June 2026
Page Number: 397-402
DOI: https://doi.org/10.5281/zenodo.20024380

ABSTRACT
This study explores the impact of digital currency on the financial system, focusing on its role in transforming traditional financial practices. Digital currencies, including cryptocurrencies and central bank digital currencies (CBDCs), have introduced new methods of payment, investment, and value
transfer. The research examines key aspects such as efficiency, transparency, security, and financial inclusion brought about by digital currency adoption. It also analyzes the challenges faced by financial systems, including regulatory issues, volatility, cybersecurity risks, and lack of awareness among
users. Using exploratory research methods, the study reviews existing literature, reports, and market trends to understand the evolving landscape. The findings suggest that while digital currencies offer significant opportunities for innovation and growth in the financial sector, they also require strong regulatory frameworks and technological safeguards to ensure stability and trust. Overall, digital currency is reshaping the financial ecosystem, influencing both institutions and consumers globally.

Keywords: Digital Currency, Cryptocurrency, Financial System, Blockchain Technology, Financial Inclusion