Advanced technology inventions have changed the working style of industries across the globe. The implementation of digitisation policy by GOI has put the economy at the cusp of transmitting to the advanced phase of financial system. The notable increase in fintech companies played a crucial role in streamlining banking services and to provide the personalised banking services accordingly. These fintech companies leverage technologies like machine learning, data analytics, blockchain and artificial intelligence. These modern technologies disrupted the traditional banking methods and help banking industry to provide democratic and innovative solutions to their customers in wealth management, insurance etc. In this journey, a lot of new and advanced payment modes are developed. The strongest feather has been added to this payment system by central banks in the form of Central bank Digital Currencies. CBDCs no doubt has the strength and potential to revolutionise the Indian financial system and extend across the existing borders. It can provide seamless benefits in the global trade and have remarkable impression on real world. The only thing required is to balance it with the conducive governance that guarantees the facilities to all. CBDC is considered as a logical and effective step in the transformation of an economy. However, a country needs to scrutinize, adopt and analysed effectively before adventuring in the territory of unexplored digital currencies. In this context, this paper provides a detailed explanation of Central Bank Digital Currency (CBDC) and differentiate it from other digital cryptocurrencies, examining the benefits and potential challenges they present. The study discussed the broader implications of adopting CBDC for monetary policy and financial stability and how they can be strategically deployed to create a more inclusive and environmentally conscious financial system. As we move towards a digital and sustainable future, CBDCs could be the key to unlocking new pathways for economic growth that are both equitable and sustainable.
