Digital currencies challenge traditional banking systems by offering decentralized alternatives that facilitate peer-to-peer transactions without intermediaries. This shift promotes greater financial inclusion and reduces transaction costs, particularly in regions with limited banking infrastructure. Furthermore, digital currencies can operate 24/7, leading to increased liquidity and speed in transactions. However, they also introduce regulatory challenges and volatility risks, prompting traditional banks to reconsider their business models. Adopting new technologies to integrate these currencies is crucial for staying competitive.