Research on the Impact of Digital Currency on Commercial Banks

Abstract

Digital currency, as a new form of currency, has a substantial impact on the evolution of currency. Due to its cheaper transaction costs, faster transaction speeds, and improved security level, the digital currency has become a significant part of the currency issue. In addition, compared with traditional currency, it is more in line with the requirement for development in the age of the digital economy and big data. The digital currency has greatly decreased operational expenses, diversified financial services, and enhanced the efficiency of cross-border settlements of commercial banks. Despite the benefits, it has confronted commercial banks with challenges in terms of risk prevention and control, business competitiveness, and overall profitability. 【 1 】 To this end, commercial banks must enhance their comprehensive risk management capabilities, expedite the development of digital systems and expand their financial services in order to keep pace with the development of digital currency and meet China's financial development needs.