Analyzing the Influence of Digital Currency Adoption on Traditional Banking Systems Through Data Analytics: A Study on Emerging Economies

Abstract

This study delves into the ramifications of digital currency assimilation within traditional banking systems, with a specific emphasis on emerging economies, notably Pakistan. Motivated by the escalating prominence of digital currencies and their potential to disrupt conventional banking practices. The research formulates three hypotheses to scrutinize the interrelationships between digital currency adoption, technological infrastructure, regulatory frameworks, and the operational performance of conventional banks. Employing a structured questionnaire, disseminated amongst professionals in the banking and financial sector, as well as users of both digital currencies and traditional banking services, the investigation unfolds a nuanced understanding from diverse vantage points. The findings elucidate a positive correlation between heightened digital currency adoption and the enhanced performance of conventional banks. Additionally, a robust technological infrastructure and a conducive regulatory environment emerge as pivotal factors significantly shaping the performance of traditional banks in the milieu of digital currency adoption. These empirical results contribute substantively to the extant literature, underscoring the imperative for banks to acclimate to technological progressions and for policymakers to cultivate regulatory frameworks that strike a judicious balance between innovation and financial stability. While the study proffers valuable insights, it remains cognizant of its limitations in scope and propounds directions for future research, advocating for broader geographical representation and the exploration of other nascent technologies within the realm of finance.