Role of Artificial Intelligence in Digital Currency and Future Applications

As technology plays a major role in financial and banking sector, trust and secrecy are considered as crucial challenges in the banking sector. Despite the hype, the infrastructure payment system also leads to some challenges, including the removal of the interbank payment system by application-based payment methods like Google Pay. The question of whether a central bank should issue digital currency that the general public can utilize is investigated in this research study. After analyzing the probable justifications for a central bank to introduce a digital currency, it describes a benchmark central bank digital currency (CBDC) with traits similar to cash. This study focuses on the role of artificial intelligence in the implementation of different currencies. With an emphasis on central bank seigniorage, monetary policy, the stability of the banking system and the economy, as well as payments, the impacts of digital currency are examined. Moreover, this study focuses on recommendations and problems with the implementation of digital currency.