How might the rise of central bank digital currencies (CBDCs) impact traditional banking systems worldwide?

With the increasing interest in and development of central bank digital currencies (CBDCs) by numerous countries, there's a growing curiosity about their potential effects on the existing banking infrastructure. CBDCs promise to offer enhanced transaction efficiencies and greater financial inclusion, but how might they disrupt the roles and operations of traditional banks? This question invites exploration into how banks might adapt their business models, the potential challenges they face, such as diminished deposits and changes in lending dynamics, and how regulatory frameworks might evolve to accommodate these transformative changes. Understanding these dynamics is critical as digital currencies become more integrated into global financial systems.