Abstract:
The rise of digital currencies, such as Bitcoin and Ethereum, has sparked significant interest and debate about their potential impact on traditional banking systems. This paper aims to explore the various ways in which digital currencies are reshaping the landscape of traditional banking, including their influence on payment systems, financial intermediation, regulatory frameworks, and the overall stability of the banking sector. By examining both the opportunities and challenges presented by digital currencies, this study seeks to provide a comprehensive understanding of their implications for traditional banking systems.

Table of Contents:

1. Introduction
1.1 Background and Significance
1.2 Research Objectives
1.3 Scope and Limitations

2. Overview of Digital Currencies
2.1 Definition and Characteristics
2.2 Historical Development
2.3 Types of Digital Currencies

3. Impact on Payment Systems
3.1 Disintermediation of Transactions
3.2 Cross-Border Payments
3.3 Central Bank Digital Currencies (CBDCs)

4. Influence on Financial Intermediation
4.1 Decentralized Finance (DeFi)
4.2 Peer-to-Peer Lending
4.3 Asset Tokenization

5. Regulatory Challenges and Responses
5.1 AML/CFT Concerns
5.2 Consumer Protection
5.3 Regulatory Approaches

5.4 Stability and Resilience of Traditional Banking
5.5 Systemic Risk Considerations
5.6 Impact on Monetary Policy
5.7 Future Scenarios and Mitigation Strategies