Abstract

This paper analyses the role of artificial intelligence (AI) in improving the security of digital currencies. AI techniques, especially deep learning and machine learning, are recruited to alleviate security threats on digital currency trading platforms and create a real-time risk alert system. In Central Bank Digital Currency (CBDC) projects, central banks engage in discussions about the ethical repercussions of AI use. This paper also highlights the formation of decentralised cryptocurrencies initiated by Bitcoin, which has transitioned from payment method to apparent financial asset. In spite a numerous range of cryptocurrencies, trading challenges equivalent to traditional finance, such as fraud detection, price prediction, etc. Furthermore, the findings emphasize the significant challenges of trust and confidentiality within the banking sector while embracing the complexities stated by contemporary payment systems. Considering all this AI’s paramount role in enacting digital currencies and inspects the impact on monetary policy, banking stability, and recommendations for successful digital currency deployment.

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